Mergers and Productivity: Evidence from Taiwanese Manufacturing Firms

This has led to a wide-ranging debate on the causes and performances of merger. In this paper, we provide evidence on merger from the standpoint of relative labor productivity and relative total factor productivity.

Our empirical work examines the Taiwanese manufacturing firms’ motivation of merger and how the merger firms perform after merger. On the basis of a sample of 6140 manufacturing firms, we have found that (1) the merger firms with larger relative productivity and firm size have higher probability to merger. (2) R&D has positive and significant impact on merger, but market power doesn’t have a significant effect on merger.