Employment Change after Takeovers: The Role of Executive Ownership

Abstract

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The Effect of Mergers and Acquisitions on Employees: Wealth Transfer, Gain‐Sharing or Pain‐Sharing?

“…Employment decline may also arise from higher staff turnover (Cannella and Hambrick, 1993;Cording et al, 2008, Cording et al, 2014. But the evidence is not all negative for labour: a recent British study finds growth in employment after takeovers in around half of cases (Kuvandikov et al, 2014). There is also some evidence of wage increases following acquisitions (Beckmann and Forbes, 2004;Conyon et al, 2004;Siegel and Simmons, 2010;Amess et al, 2014).…”

Workforce reductions and post-merger operating performance: The role of corporate governance

“…Similar to Krishnan et al (2007) we also control for acquisition motives because takeovers occur for different reasons which can affect their outcome. We obtain data on takeover objectives from newspaper articles in The Financial Times and classify them into three types of motiveshorizontal growth, horizontal efficiency and vertical integrationin the spirit of Kuvandikov et al (2014). These takeover objectives are coded into three dummies which are defined as follows.…”

“…First, the UK market is the second largest M&A market in the world (Lehmann, 2016) where employment reductions often follow bids (Conyon, Girma, Thompson, & Wright, 2002;Kuvandikov, Pendleton, & Higgins, 2014). Second, in the UK, several reports have been introduced to improve corporate governance practices since the early 1990s (e.g., Cadbury Report, 1992;Greenbury Report, 1995;Hampel Report, 1998;Higgs Report, 2003).…”

Activist Hedge Funds and Takeovers: Their Effects on Employment and Performance

“…Previous studies find that post‐merger restructuring involves large‐scale workforce reductions (Amess, Girma and Wright, 2014; Conyon et al ., 2002) and lay‐offs (Kuvandikov, Pendleton and Higgins, 2014, 2020), which may impact on labour productivity. Some studies conclude that M&As enhance labour productivity, although such transactions result in post‐merger workforce downsizing (McGuckin and Nguyen, 2001; Siegel and Simons, 2010).…”