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The nature of post-merger technological progress outcomes is unclear, with theoretical and empirical literature being inconclusive and equivocal. We contend that merger motives materially drive post-merger outcomes and that post-merger outcomes vary significantly because merger motives vary. Hence, assessments of post-merger outcomes should take into account such motives, by the use of suitable statistical constructs. Our retrospective study has empirically assessed post-merger technology deployment patterns in the US telecommunications industry over a considerable recent historical period of major institutional changes. The events have provided information enabling us to conduct a detailed evaluation of the relative outcomes of differently motivated mergers under clean natural experiment conditions. Mergers have been classified as those undertaken for consolidation, financial, and market exploitation reasons. We have found consolidation and market exploitation motivated mergers to have had a positive impact, resulting in materially greater technology deployment outcomes for firms experiencing these mergers. The largest category of mergers that the firms have engaged in have been of the liquidity-seeking type, and such liquidity-seeking mergers have resulted in materially lower levels of technology deployment outcomes. On balance, we unequivocally conclude that negative lower technology deployment outcomes have outweighed the positive higher technology deployment outcomes. Such results should meaningfully influence agencies' approaches in deciding whether or not to permit important sector mergers under review.

ABSTRACTThis article presents the outcomes of an evaluation of the impact of the series of mergers of the local exchange companies that have taken place between 1988 and 2001 on an important measure of performance of the firms undergoing the mergers. The analysis reveals that after firms have undertaken one merger they experience little or no growth after such mergers, but the impact of second mergers on firm growth have been negative. If an important motive in undertaking mergers has been to enhance firm growth, then the merger waves that have been approved and consummated have led to performance declines. The impacts of the merger wave on the growth of the telecommunications sector firms have been negative.

This article evaluates the human capital consequences of several mergers of local exchange companies that took place between 1988 and 2001 in the telecommunications industry of the United States. Most firms in the sector underwent one merger event while other firms underwent two events. The levels of jobs and average wages in the firms are assessed after the merger events and analysis reveals that, while the first merger events experienced by firms led to growth in employment and compensation, second merger events, which included several mega-mergers of the late 1990s and early 2000s, have led to stagnation and decline in employment levels and to negative human capital outcomes with declines in wage levels.