New firm formation in the wake of mergers and acquisitions: An exploration of push and pull factors

PublicationArticle (with peer review)
acquisitions, Arbetsmarknadsprogrammet, entrepreneurial opportunity, entrepreneurial spawning, firm formation, mergers, Monia Lougui, opportunity costs


This study investigates the relationship between mergers and acquisitions (M&A) and entrepreneurial spawning in labour-intensive service sectors. We discuss two sets of theoretical mechanisms. First, M&As may push employees into entrepreneurship by lowering the average barriers of leaving the current employment (i.e. being associated with general deterioration of working conditions). Second, M&A activities may generate new entrepreneurial opportunities, which are first and foremost accessible by employees directly affected by M&As. Results on entrepreneurial spawning in 3,198 Swedish firms during the time period 2000–2009 confirm that the number of firms spawned from a specific incumbent increases following an M&A. Push-oriented factors are found to contribute to this effect, but a dominating part of the total effect remains in the presence of proxies for push-effects. This suggests that pull-oriented explanations of opportunity creation in the wake of M&As constitute an important avenue for further research on the antecedents of new firm formation.

Lougui, M. & Broström, A. (2020). New firm formation in the wake of mergers and acquisitions: An exploration of push and pull factors. Journal of Evolutionary Economics. DOI: 10.1007/s00191-020-00678-4

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