Three Essays on the Effects of Mergers

Download or read book Three Essays on the Effects of Mergers written by Ozge Ozden and published by . This book was released on 2010 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on two approaches to investigate the effects of mergers: employee behavior and market structure. In my first essay, I emphasize on the human side of mergers and theoretically analyze the effects of mergers on wage incentives by extending the principal-agent model of Akerlof and Kranton (2003; 2005). The post-merger model demonstrates the effects of utility losses due to changes in organizational identification and identity threats associated with a merger on wage incentives of the employees. The results suggest that there is no difference between wage differentials in pre- and post-merger periods. However, post-merger optimal wages would be higher in order to compensate for the utility loss of an employee. In my second and third essays, I empirically analyze the effects of mergers on the pricing behavior of banks by using a unique data set that includes detailed information on loan, borrower, lender, and market characteristics, including concentration. The results suggest that bank mergers lead to favorable mortgage interest rates, especially for disadvantaged borrowers and neighborhoods.