Essays on M&A and Human Capital

In the first chapter, we use a job-posting dataset to investigate whether and when post-merger hiring helps merged firms realize synergies. A growing body of research emphasizes human capital as a key lever for creating synergies following mergers and acquisitions. While previous research has given primacy to post-merger retention, deletion, or reallocation of human capital for generating synergies, there has been less exploration of the post-merger addition of human capital. Using a dataset of job postings and information on 2,530 M&A transactions between 2011 and 2020, we examine this underexplored mechanism for creating synergies. The results show that acquirers attempt to hire human capital that complements the combined entity’s pre-existing talent pool, thereby improving acquisition performance.

In the second chapter, we investigate the conditions under which firms pivot to alternative strategies, such as forming alliances or focusing on internal development, following the termination of initial technological M&A attempts. Using a sample of 120 technological M&A deal termination events among publicly-traded U.S. firms between 2003 and 2019, our findings reveal a tendency for firms to repeat the M&A strategies, but significant negative market reactions and terminations attributable to the firm encourage a shift towards alliances or internal development. Notably, we find a preference for internal development, also reflected in increased engineering and data analytics job postings.

In the third chapter, we examine the “strategic paralysis” phenomenon—how unexpected delays between M&A announcements and deal closure impact firm performance following the deal announcement. Using machine learning models trained on four decades of U.S. public M&A data to identify abnormal delays, we analyze a matched sample of 295 delayed and 295 timely terminated deals. Our findings demonstrate that firms experiencing prolonged deal uncertainty significantly reduce corporate investments, particularly in intangible assets, and subsequently suffer performance declines. This strategic paralysis persists beyond deal termination, revealing how temporal dynamics in M&A processes create lasting organizational consequences. By identifying this previously overlooked mechanisms, we extend the understanding of how time delays affect resource allocation decisions and competitive positioning in dynamic environments.