||Does Managerial Experience in a Target Firm Matter for the Retention of Managers after M&As?
Takii, Katsuya ,
Suzuki, AyakoHirata, Kenjiro
45 , 2016-05-20 , Osaka School of International Public Policy
This paper examines how managers' tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a model that distinguishes several hypotheses about the effect of tenure on separation. Our results suggest that experience as an employee increases firm-specific skills, but at the expense of the ability to learn new skills. However, experience as a board member does not have this effect in Japanese firms, the structure of which is known to encourage specific skills. Further, we provide a novel method to correct for selection biases when using data on managers.