Productivity in transition: The temporal effects of mergers and acquisitions in US grain marketing cooperatives

Abstract

This study examines whether the number of years since a merger or acquisition, referred to as mergers and acquisition (M&A) age, is associated with the total factor productivity (TFP) of a sample of US grain marketing cooperatives from 2004 to 2020. Firm‐level TFP measures are recovered from flexible translog production functions that are estimated using Wooldridge‐style instrumental‐variable generalized method of moments (IV‐GMM) and Ackerberg–Caves–Frazer (ACF) approaches. The resulting productivity measures are subsequently analysed using fixed‐effects and two‐step system GMM models. The estimated association between M&A age and productivity is small in magnitude and statistically insignificant in the main specifications across both productivity measures and both second‐stage estimators. This conclusion remains largely unchanged across several robustness checks. Overall, the findings suggest that, within the sample of US grain marketing cooperatives analysed, the passage of time alone is insufficient to explain productivity differences following mergers and acquisitions.