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Professor Merih Sevilir, PhD

Professor Merih Sevilir, PhD
Current Position

since 6/22

Head of the Department of Laws, Regulations and Factor Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 6/22

Professor

European School of Management and Technology Berlin (ESMT)

since 1/23

Head of the Research Group Startup Creation

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests
  • finance
  • labour economics
  • corporate governance

Merih Sevilir joined the institute in June 2022. She is head of the Department of Laws, Regulations and Factor Markets at IWH and Professor of Finance at European School of Management and Technology (ESMT) in Berlin.

Merih Sevilir studied at Bogazici University, University of Warwick, and INSEAD. She obtained her PhD degree in 2003 from INSEAD. Prior to joining IWH, she was Associate Professor of Finance at Indiana University.

Your contact

Professor Merih Sevilir, PhD
Professor Merih Sevilir, PhD
Leiter - Department Laws, Regulations and Factor Markets
Send Message +49 345 7753-808

Publications

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Access to Public Capital Markets and Employment Growth

Alexander Borisov Andrew Ellul Merih Sevilir

in: Journal of Financial Economics, No. 3, 2021

Abstract

This paper examines the effect of going public on firm-level employment. To establish a causal effect, we employ a novel data set of private firms to investigate employment growth in IPO firms relative to a group of firms that file for an IPO but subsequently withdraw their offering. We find that employment increases significantly after going public, and the increase is more pronounced in industries with requirements for highly skilled labor and greater dependence on external finance. Improved ability to undertake acquisitions and a strategic shift toward commercialization, rather than agency problems, explain employment growth. Overall, these results highlight the importance of going public for firms' employment policies.

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Activism and Empire Building

Nickolay Gantchev Merih Sevilir Anil Shivdasani

in: Journal of Financial Economics, No. 2, 2020

Abstract

Hedge fund activists target firms engaging in empire building and improve their future acquisition and divestiture strategy. Following intervention, activist targets make fewer acquisitions but obtain substantially higher returns by avoiding large and diversifying deals and refraining from acquisitions during merger waves. Activist targets also increase the pace of divestitures and achieve higher divestiture returns than matched non-targets. Activists curtail empire building through the removal of empire building chief executive officers (CEOs), compensation based incentives, and appointment of new board members. Our findings highlight an important channel through which activists improve efficiency and create shareholder value.

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Venture Capitalists on Boards of Mature Public Firms

Ugur Celikyurt Merih Sevilir Anil Shivdasani

in: Review of Financial Studies, No. 1, 2014

Abstract

Venture capitalists (VCs) often serve on the board of mature public firms long after their initial public offering (IPO), even for companies that were not VC-backed at the IPO. Board appointments of VC directors are followed by increases in research and development intensity, innovation output, and greater deal activity with other VC-backed firms. VC director appointments are associated with positive announcement returns and are followed by an improvement in operating performance. Firms experience higher announcement returns from acquisitions of VC-backed targets following the appointment of a VC director to the board. Hence, in addition to providing finance, monitoring and advice for small private firms, VCs play a significant role in mature public firms and have a broader influence in promoting innovation than has been established in the literature.

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Working Papers

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R&D Tax Credits and the Acquisition of Startups

William McShane Merih Sevilir

in: IWH Discussion Papers, No. 15, 2023

Abstract

We propose a novel mechanism through which established firms contribute to the startup ecosystem: the allocation of R&D tax credits to startups via the M&A channel. We show that when established firms become eligible for R&D tax credits, they increase their R&D and M&A activity. In particular, they acquire more venture capital (VC)-backed startups, but not non-VC-backed firms. Moreover, the impact of R&D tax credits on firms’ R&D is increasing with their acquisition of VC-backed startups. The results suggest that established firms respond to R&D tax credits by acquiring startups rather than solely focusing on increasing their R&D intensity in-house. We also highlight evidence that startups do not appear to benefit from R&D tax credits directly, perhaps because they typically lack the taxable income necessary to directly benefit from the tax credits. In this context, established firms can play an intermediary role by acquiring startups and reallocating R&D tax credits, effectively relaxing the financial constraints faced by startups.

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Going Public and the Internal Organization of the Firm

Daniel Bias Benjamin Lochner Stefan Obernberger Merih Sevilir

in: SSRN Working Paper, May 2022

Abstract

We examine how firms adapt their organization when they go public. To conform with the requirements of public capital markets, we expect IPO firms to become more organized, making the firm more accountable and its human capital more easily replaceable. We find that IPO firms transform into a more hierarchical organization with smaller departments. Managerial oversight increases. Organizational functions dedicated to accounting, finance, information and communication, and human resources become much more prominent. Employee turnover is sizeable and directly related to changes in hierarchical layers. New hires are better educated, but younger and less experienced than incumbents, which reflects the staffing needs of a more hierarchical organization. Wage inequality increases as firms become more hierarchical. Overall, going public is associated with a comprehensive transformation of the firm's organization which becomes geared towards efficiently operating a public firm.

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Private Equity in the Hospital Industry

Janet Gao Yongseok Kim Merih Sevilir

in: ECGI Working Paper, No. 787, 2021

Abstract

We examine employment and patient outcomes at hospitals acquired by private equity (PE) firms and PE-backed hospitals. While employment declines at PE-acquired hospitals, core medical workers (physicians, nurses, and pharmacists) increase significantly. The proportion of wages paid to core workers increases at PE-acquired hospitals whereas the proportion paid to administrative employees declines. These results are most pronounced for deals where the acquirers are publicly traded PE-backed hospitals. Non-PE-backed acquirers also cut employment but do not increase core workers or reduce administrative expenditures. Finally, PE-backed acquirers are not associated with worse patient satisfaction or mortality rates compared to their non-PE-backed counterparts.

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Keywords

Startups Corporate Finance Regulation
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