Labour productivity in M&As: industry sector vs. services sector

Due to the high failure rate of the mergers and acquisitions (M&A) strategy, this study raises the questions of whether the pre-M&A performances of the acquirer and the target could predict improvement in labour productivity in the post-M&A period. The study also conducted sector analysis by comparison between three groups of the sample: the industry sector M&As, the services sector M&As and the all sectors M&As. The study uses a sample of 394 public firms from 13 countries that were involved in M&As. The study highlights the differences between the sectors. Buying a larger target in the services sector may not hinder the labour productivity in the post-M&A period, while in the industry sector, it may end in a negative influence on labour productivity. The study also shows that the labour productivity is higher in the services sector compared to the labour productivity in the industry sector, particularly during the integration stage.