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Acquiring Labor

Author

Listed:
  • Paige Ouimet

    (Kenan-Flagler Business School, University of North Carolina, CB 3490, McColl Building, Chapel Hill NC 27599, USA)

  • Rebecca Zarutskie

    (Federal Reserve Board, 20th Street and Constitution Avenue, NW, Washington, DC 20551, USA)

Abstract

We present evidence that some firms pursue mergers with an objective of acquiring and retaining the target firm’s employees. We identify such target firms by the language used to describe employees in their 10-K statements, focusing on references to “skilled” employees. We find a positive correlation between the use of the word “skilled” and post-merger employment outcomes. Moreover, we find that it is the target employees most valuable to the firm that are relatively more likely to be retained following an acquiring-labor-motivated acquisition. Acquirers appear to retain the high value employees in acquiring-labor-motivated acquisitions by providing these workers with relatively greater wage increases.

Suggested Citation

  • Paige Ouimet & Rebecca Zarutskie, 2020. "Acquiring Labor," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 1-38, September.
    • Handle: RePEc:wsi:qjfxxx:v:10:y:2020:i:03:n:s2010139220500111
    DOI: 10.1142/S2010139220500111
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Acquiring a firm for its workforce
      by Economic Logician in Economic Logic on 2011-11-09 21:18:00

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    Cited by:

    1. Camelia M. Kuhnen & Paul Oyer, 2016. "Exploration for Human Capital: Evidence from the MBA Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 255-286.
    2. Giacinta Cestone & Chiara Fumagalli & Francis Kramaz & Giovanni Pica, 2015. "Insurance Between Firms: The Role of Internal Labor Markets," CSEF Working Papers 386, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 22 Jan 2020.
    3. Liang, Hao & Renneboog, Luc & Vansteenkiste, Cara, 2017. "Cross-Border Acquisitions and Employee-Engagement," Other publications TiSEM 302b5e09-4d1d-4b32-9d74-7, Tilburg University, School of Economics and Management.
    4. Jie (Jack) He & Tao Shu & Huan Yang, 2018. "The Employee Clientele of Corporate Leverage: Evidence from Personal Labor Income Diversification," Working Papers 18-01, Center for Economic Studies, U.S. Census Bureau.
    5. Giacinta Cestone & Chiara Fumagalli & Francis Kramaz & Giovanni Pica, 2015. "Insurance Between Firms: The Role of Internal Labor Markets," CSEF Working Papers 386, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 22 Jan 2020.
    6. John, Kose & Knyazeva, Anzhela & Knyazeva, Diana, 2015. "Employee rights and acquisitions," Journal of Financial Economics, Elsevier, vol. 118(1), pages 49-69.
    7. Kuhnen, Camelia M. & Oyer, Paul, 2012. "Exploration for human capital: Theory and evidence from the MBA labor market," MPRA Paper 39411, University Library of Munich, Germany.
    8. Lee, Kyeong Hun & Mauer, David C. & Xu, Emma Qianying, 2018. "Human capital relatedness and mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 129(1), pages 111-135.
    9. Geoffrey Tate & Liu Yang, 2015. "The Human Factor in Acquisitions: Cross-Industry Labor Mobility and Corporate Diversification," Working Papers 15-31, Center for Economic Studies, U.S. Census Bureau.

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