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Internal Markets and M&A Efficiency Gains: Evidence from Bank Branch-level Data

Year: 2025

Type: article

Abstract: We study how firms reallocate internal resources after an M&A operation. We focus on the banking sector and leverage matched employee-branch data and branch-level financial information. Firms use the enlargement of internal labor and capital markets triggered by the M&A to reallocate resources within the organization. Labor and internal funds are reallocated to acquirer branches. Restructuring enhances profitability at both acquirer and target branches, even after accounting for local market power gains. We show that these effects are more prominent in municipalities where the consolidated bank had larger local internal labor markets at the time of the consolidation.

Source: ERSA Working Paper Series

DOI: 10.71587/rjffpn03

Authors: Argentieri Mariani, Lucas, Ricca, Bernardo

Institution: Bocconi University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W6958670760

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