Publication Type
Journal Article
Version
acceptedVersion
Publication Date
6-2018
Abstract
Organizational capital is the accumulation and use of private information to enhance economic efficiency for a firm. Theory has argued that organizational capital is typically embodied in employees and the organizational structure, and is hard to transfer across organizations. In this paper, we study whether organizational capital is transferable across firms via mergers. The evidence shows that acquirers gain more from acquiring firms with higher organizational capital and acquirers are also willing to pay a higher premium for higher organizational capital targets. The evidence suggests that acquiring higher organizational capital targets creates synergies which are shared between acquirers and targets.
Keywords
Abnormal returns, Mergers and acquisitions, Organizational capital, Synergy
Discipline
Finance and Financial Management | Organizational Behavior and Theory
Research Areas
Finance
Publication
Finance Research Letters
Volume
25
First Page
30
Last Page
35
ISSN
1544-6123
Identifier
10.1016/j.frl.2017.10.004
Publisher
Elsevier
Citation
LI, Peixin; LI, Frank Weikai; WANG, Baolian; and ZHANG, Zilong.
Acquiring organizational capital. (2018). Finance Research Letters. 25, 30-35.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5345
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org./10.1016/j.frl.2017.10.004