How general is managerial human capital?: Evidence from the Retention of Managers after M&As

Kenjiro Hirata, Ayako Suzuki and Katsuya Takii
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Kenjiro Hirata: Faculty of Economics, Kobe International University
Ayako Suzuki: School of International Liberal Studies, Waseda University

No 19E010, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This paper investigates the transferability of managerial experience by examining how managers' tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a general equilibrium model that distinguishes several hypotheses on managerial experiences based on the coefficients of tenure on separation, given several data limitations. In particular, the paper provides a novel method to correct for selection biases by utilizing the timing of selection in a selected sample, which does not require a random sample from the population. Our results suggest that Japanese firms value both target firm-specific and general human capital after M&As and that experience as an employee increases firm-specific skills, but at the expense of the accumulation of general skills. However, experience as a board member does not have this effect.

Keywords: Tenure; Managerial Skill; Managerial Turnover after M&As; Selection Bias; Cox Proportional Hazards Model (search for similar items in EconPapers)
JEL-codes: G34 J41 J63 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2019-09
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-lab
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Related works:
Journal Article: How general is managerial human capital?: Evidence from the Retention of Managers after M&As (2023)
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