Seminars

◈ 주   제 : Inventor Mobility and Value Creation in Mergers and Acquisitions - Chun-Yu Ho, Gusang Kang, Gerald R. Marschke, Won Sung
◈ 발표자 : 성 원(Bank of Korea)
◈ 일   시 : 2024년 3월 27일 수요일 16:30 ~ 17:45
◈ 장   소 : 우석경제관(223동) 308호
◈ 주   관 : 경제학부, 경제연구소 한국경제혁신센터, SSK, BK21

Inventor Mobility and Value Creation in Mergers and Acquisitions

Abstract:

32 percent of mergers in the high-tech sector are preceded by an exchange between the firms of workers directly involved in innovation, suggesting that such mobility and mergers might be complements. Pre-merger or acquisition, this exchange can be seen as (1) an indicator of compatibility and therefore a predictor of a merger or acquisition, (2) a strategy for screening potential merger partners, or (3) as laying the groundwork for a successful merger. We employ a two-sided matching model for acquirers and targets that allows them to choose whom to merge with. Applying this model, we examine how inventor mobility affects value creation in mergers and acquisitions (M&As) in the tech sector. Inventors exchanged between inventing firms have been interpreted as a mechanism of knowledge transfer. We measure inventor mobility by the turnover of inventors between acquirer and target before the merger. Based on a sample of 348 mergers of U.S. manufacturing firms during 1980-2015, we find that an exchange of inventors between firms increases the value of their merging, which in turn increases their merger likelihood. After instrumenting for inventor mobility, the positive relationship between mobility and merger likelihood remains, suggesting at least some of mobility’s effect on merger likelihood is causal ((2) and (3)). We also provide evidence that labor policies that affect firm-to-firm worker mobility affect M&A activity and innovation rates.