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Measuring and decomposing productivity change in the presence of mergers
journal contribution
posted on 2019-10-24, 08:33 authored by Pablo Arocena, David SaalDavid Saal, Takuya Urakami, Michael ZschilleManagers and policymakers often encourage mergers and acquisitions of companies with the aim of increasing the productivity of the involved firms. However, problems with the measurement of productivity change usually occur when analyzing companies that merged during the period under consideration: while only individual predecessor firms exist in the base period, in the following period only the integrated company is observable. We therefore propose a new adaptation of the Malmquist index that is appropriate in the presence of mergers, which also allows for a detailed analysis of their effects on productivity change. Moreover, we believe that our methodological approach provides a useful widely applicable tool to identify the contribution of past mergers to productivity growth. We illustrate our merger consistent productivity decomposition, by using a sample of Japanese water supply systems observed in 2003, and the resulting consolidated and non-consolidated systems observed in 2009. On average, we find that mergers contributed positively to productivity change and that our merger consistent decomposition contributes to a better understanding of the determinants of productivity performance in the Japanese water sector.
Funding
Spanish Ministry of Economy and Competitiveness (project ECO2017-86054-C3-2-R)
JSPS Grant-in-Aid for Scientific Research(C) Grant Number 17K03738
DIW Berlin - German Institute for Economic Research, Germany
History
School
- Business and Economics
Department
- Business
- Economics
Published in
European Journal of Operational ResearchVolume
282Issue
1Pages
319 - 333Publisher
ElsevierVersion
- AM (Accepted Manuscript)
Rights holder
© Elsevier B.V.Publisher statement
This paper was accepted for publication in the journal European Journal of Operational Research and the definitive published version is available at https://doi.org/10.1016/j.ejor.2019.08.048.Acceptance date
2019-08-28Publication date
2019-08-31Copyright date
2019ISSN
0377-2217Publisher version
Language
- en
Depositor
Prof David Saal. Deposit date: 22 October 2019Usage metrics
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