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<p>This paper investigates the transferability of managerial human capital 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 human capital 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&amp;As and that experience as an employee increases firm-specific skills, but at the expense of the accumulation of general skills. However, managerial experience does not have this effect.</p>
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This paper investigates the transferability of managerial human capital 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 human capital 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, managerial experience does not have this effect.

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

Osaka School of International Public Policy

IZA Journal of Labor Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

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

This paper investigates the transferability of managerial human capital by examining how managers’ tenures in target firms influence their probability of...

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

Published Online: Dec 31, 2023

Page range: -

Accepted: Apr 11, 2023

DOI: https://doi.org/10.2478/izajole-2023-0008

Keywords
Tenure, Managerial Skill, Managerial Turnover after M&As, Selection Bias, Cox Proportional Hazards Model

© 2023 Kenjiro Hirata et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

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

Published Online: Dec 31, 2023

Page range: -

Accepted: Apr 11, 2023

DOI: https://doi.org/10.2478/izajole-2023-0008

KeywordsTenure, Managerial Skill, Managerial Turnover after M&As, Selection Bias, Cox Proportional Hazards Model

© 2023 Kenjiro Hirata et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Tenure, Managerial Skill, Managerial Turnover after M&As, Selection Bias, Cox Proportional Hazards Model