Publication Type

Journal Article

Publication Date

10-2017

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 capitalis 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

First Page

1

Last Page

13

ISSN

1544-6123

Identifier

10.1016/j.frl.2017.10.004

Publisher

Elsevier

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org./10.1016/j.frl.2017.10.004

Share

COinS