The Economic Case for Mergers: Old, New, Borrowed, and Blue

摘要

I have tried to examine how three different economic perspectives look at the firm and mergers to contextualize the rich understanding the women I interviewed had of mergers. In particular I have highlighted how the three perspectives look at knowledge, time lags, goals, and the relationship between the firm and the individual. I have argued that both neoclassical economics and NIE leave aside what are important elements of firms generally and mergers specifically. Both disciplines cause the gaze to be turned from what are interesting and important features of mergers and turn attention toward the unobservable preferences of firms and individuals. While both theories have interesting elements, neoclassical economics, for instance, points out the importance of separation of ownership and control and NIE highlights the importance of bounded rationality and transaction costs, it is only under IE analysis we can start to answer the questions, What happens when firms merge? and Why do mergers fail so often? with anything like satisfaction. The difference in how the three theories treat change in general and mergers in particular is not just of academic interest―mergers are increasingly common, and many workers will experience a merger or acquisition within their working lifetime. So having a feel for the effects of mergers will give us a feel for the future of merged firms but also the experience of work for an increasing number of people. IE helps situate the experiences of the employees I interviewed, but none of the theories have a good explanation as to why firms merged in the first place. A lot more work needs to be done on an adequate explanation of and for mergers. Further empirical enquiry will help us understand the reason for and the consequences of firms marrying, but so too will borrowing from other disciplines (for instance, psychology, management, sociology). The theory that emerges from this process may have something old, new, borrowed, and blue, but it should be a far better description of the reality of firms marrying.