How Do Human Capital Assets Affect Cumulative Abnormal Returns During Merger and Acquisition Announcements?

The acquisition of physical assets is very different from acquisition of human capital assets. Holding physical asset size fixed, acquisitions involving more target employees are associated with lower announcement period returns. This effect is strongest in 1) within-industry mergers, 2) cross-region mergers, and 3) mergers involving employees with high-valued skill sets. Each of these conditions suggests MA that is, controlling for this EF, merger size is unrelated to announcement period returns.