KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
New firm formation in the wake of mergers and acquisitions: Are employees pushed or pulled into entrepreneurship?
() and Anders Broström
Abstract: This study investigates the relationship between mergers
and acquisitions (M&A) and employee entrepreneurship in human
capital-intensive service sectors. We investigate two sets of theoretical
mechanisms. First, M&As may push employees entrepreneurship by lowering the
average barriers of leaving the current employment (i.e. being associated
with general deterioration of working conditions). Second, M&A activities
may generate new entrepreneurial opportunities, which are first and
foremost accessible by employees directly affected by M&As. Results on
employee entrepreneurship in 3 039 Swedish firms during the time period
2000-2009 confirm that the number of firms spawned from a specific
incumbent increases following an M&A. Push-oriented factors are found to
contribute to this effect, but a dominating part of the total effect
remains unexplained. This suggests that pull-oriented explanations of
opportunity creation in the wake of M&As constitute an important avenue for
further research on employee entrepreneurship.
Keywords: employee entrepreneurship; mergers; acquisitions; opportunity costs; entrepreneurial opportunity; (follow links to similar papers)
JEL-Codes: G34; L26; L80; M50; (follow links to similar papers)
21 pages, February 22, 2016
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