Does Managerial Experience in a Target Firm Matter for the Retention of Managers after M&As?

Kenjiro Hirata, Ayako Suzuki and Katsuya Takii

No e108, Working Papers from Tokyo Center for Economic Research

Abstract: 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.

Pages: 46 pages
Date: 2016-05
New Economics Papers: this item is included in nep-bec
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Working Paper: Does Managerial Experience in a Target Firm Matter for the Retention of Managers after M&As? (2016)
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