Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry

Serguey Braguinsky, Atsushi Ohyama, Tetsuji Okazaki and Chad Syverson

American Economic Review, 2015, vol. 105, issue 7, 2086-2119

Abstract: We explore how changes in ownership affect the productivity and profitability of producers. Using detailed data from the Japanese cotton spinning industry at the turn of the last century, we find that acquired firms' production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition. They were much less profitable, however, due to higher inventory levels and lower capacity utilization—differences that reflected problems in managing the uncertainties of demand. After acquisitions, less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels. (JEL D24, G32, G34, L11, L25, L66, N65)

JEL-codes: D24 G32 G34 L11 L25 L66 N65 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20140150
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Citations: View citations in EconPapers (86)

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Related works:
Working Paper: Acquisitions, productivity, and profitability: Evidence from the Japanese cotton spinning industry (2014)
Working Paper: Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry (2014)
Working Paper: Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry (2014)
Working Paper: Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry (2014)
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