SEMINARIO 26/10-Timo Kuosmanen (Turku School of Economics, University of Turku): Productivity Effects of Mergers, Acquisitions and Restructuring

Información

A substantial share of firm entry and exit observed in administrative data reflects mergers, acquisitions, spin-offs, and other forms of corporate restructuring rather than genuine market creation or destruction. This distinction matters for productivity decompositions, which typically interpret entry and exit as manifestations of Schumpeterian creative destruction. Using linked administrative data on Finnish manufacturing firms and employees over the period 2010–2022, we identify restructuring events through clustered worker flows and incorporate this classification into a structural productivity decomposition framework. The results show that firms involved in restructuring events exhibit significantly higher productivity levels than genuinely entering or exiting firms. Nevertheless, genuine entry and exit make a larger positive contribution to aggregate productivity growth. Firms undertaking acquisitions exhibit a temporary decline in labor productivity around the time of acquisition followed by gradual recovery. These findings highlight the importance of distinguishing between restructuring and genuine market turnover when interpreting productivity dynamics.