How M&A Can Lead to Better Management

A fundamental question in corporate finance is how mergers and acquisitions create value. Possibilities include generating economies of scale or scope, increasing managerial efficiency, improving production techniques, or strengthening market power. Synergies are a leading motive for doing mergers, but direct empirical evidence on how they are created is lacking. In a new study, we investigate a potential source of synergies—improvements in management practices.

We use a novel survey dataset of plant-level management practices from the U.S. Census Bureau. Specifically, we use the 2010 Management and Organizational Practices Survey, the first large-scale management practices survey of manufacturing plants in the … Read more