NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Atsushi Ohyama

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Working Papers

February 2014Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry
with Serguey Braguinsky, Tetsuji Okazaki, Chad Syverson: w19901
We explore how changes in ownership and managerial control affect the productivity and profitability of producers. Using detailed operational, financial, and ownership data from the Japanese cotton spinning industry at the turn of the last century, we find a more nuanced picture than the straightforward “higher productivity buys lower productivity” story commonly appealed to in the literature. Acquired firms’ production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition, conditional on operating. They were much less profitable, however, due to consistently higher inventory levels and lower capacity utilization—differences which reflected problems in managing the uncertainties of demand. When purchased by more profitable firms...

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