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Accession Number PB2013-110479
Title Productivity, Restructuring, and the Gains from Takeovers.
Publication Date Apr 2013
Media Count 51p
Personal Author X. Li
Abstract This paper investigates how takeovers create value. Using plant-level data, I show that acquirers increase targets productivity through more efficient use of capital and labor. Acquirers significantly reduce capital expenditures, wages, and employment in target plants, though output is unchanged. Acquirers improve targets investment efficiency through better capital reallocation. Moreover, changes in productivity help explain the merging firms announcement returns. The combined announcement returns are driven by improvements in targets productivity. Targets with greater productivity improvements receive higher premiums. These results provide some first empirical-evidence on the relation between productivity and stock returns in the context of takeovers.
Keywords Allocations
Businesses
Capital
Employment
Expenses
Gains
Investments
Labor force
Productivity
Takeovers
Targets
Wages


 
Source Agency Department of Commerce, Bureau of Census
NTIS Subject Category 96A - Domestic Commerce, Marketing, & Economics
70D - Personnel Management, Labor Relations & Manpower Studies
Corporate Author Bureau of the Census, Washington, DC. Center for Economic Studies.
Document Type Technical report
Title Note N/A
NTIS Issue Number 1324
Contract Number N/A

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