Forged at Workforce Entry? CEO Imprinting, Information Uncertainty and Merger Wave Timing

Abstract

We examine the imprinting effect of labour market conditions on a CEO's merger wave timing decisions. Based on a sample of 720 CEOs of US-based firms in merger waves between 1995 and 2018, we found that CEOs who started their careers during periods of poor labour market conditions tend to delay merger wave entry, while those who began under better conditions act earlier. We also found that the market uncertainty at the beginning of the merger wave decays this effect on CEOs whose workforce entry coincided with poor labour market conditions. This study contributes to the M&A literature by highlighting the long-term impact of early career experiences on CEO merger wave timing decisions and how those preferences may decay when faced with different conditions later in their careers.