Empirical Analysis of the Influence of Corporate Mergers on Organizational Slack

摘要

This thesis analyzes the effects of corporate mergers on organizational slack. It is hypothesized that organizational slack will be reduced in the acquiring firms following the merger. Further, it is hypothesized that the type of merger will affect the resultant change in slack. A multidimensional financial model is used to measure change in slack between pre- and post-merger time frames for 50 mergers that occurred in 1977 and 1978. Similar measures are calculated for a control group of 43 nonmerging firms. It is found that the merged firms undergo significantly greater reductions in slack than their nonmerging counterparts. Among the merged firms, horizontal mergers show the largest decrease in slack, followed by vertical mergers, and finally conglomerates.