Who Is Gone after an Acquisition? Evidence from the U.S. Video Game Industry

It is well-known that acquisitions frequently result in failures. Aiming at exploring possible reasons for this underperformance, we investigate the determinants of exit after their employer is assets. Drawing on a strategic human capital perspective, we argue that acquisitions may disrupt the complementary between an employee’s skills and employer’s activities, impacting the productivity in the value creation process and driving mobility decisions. Using data from the U.S. video game industry we find strong evidence that a higher degree of disruption translates into a higher likelihood of employee exit after an acquisition, and that an employee’s skill specialization acts as an important moderator for this relationship.