Should employment authorities worry about mergers and acquisitions?

Margolis, David

doi:10.1007/s10258-006-0007-4

Cited by 20 publications

(12 citation statements)

References 23 publications

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“…2 Bellak et al (2006) find that foreign takeovers have no causal effect on employment growth among Austrian manufacturing firms. Margolis (2006) reports the negative employment effects of M&As from France, albeit only in the short term.…”

Section: Relevant Empirical Literaturementioning

confidence: 99%

Analysing the employment effects of mergers and acquisitions

Lehto

Böckerman

2008

Journal of Economic Behavior & Organization

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This paper examines the employment effects of mergers and acquisitions (M&As) by using matched establishment-level data from Finland. Our data register practically almost all M&As in all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results show that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in nonmanufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but they exhibit an interesting sectoral variation.

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Section: Relevant Empirical Literaturementioning

confidence: 99%

Analysing the employment effects of mergers and acquisitions

Lehto

Böckerman

2008

Journal of Economic Behavior & Organization

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“…Devereux and Johnson (2006) had evaluated acquisitions of listed companies in the United Kingdom and had found that these led to job reductions of four percent in the short-run, and over 50 percent in the long-run. Behar and Hodge (2006) have reviewed the record for South African gold mines and had found that mergers led to, on average, one percent employment declines, while Margolis (2006), who had examined French industrial employment, had found that employees of acquired firms are most likely to lose their positions, and have a lower probability of employment with the merged entity, but after three years such distinctions disappear.…”

Section: Mergers Jobs and Wages: The Evidence So Farmentioning

confidence: 99%

Mergers, jobs, and wages in the United States telecommunications industry

Moussawi

Yaylacicegi²

2010

Human Relations

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This article evaluates the human capital consequences of several mergers of local exchange companies that took place between 1988 and 2001 in the telecommunications industry of the United States. Most firms in the sector underwent one merger event while other firms underwent two events. The levels of jobs and average wages in the firms are assessed after the merger events and analysis reveals that, while the first merger events experienced by firms led to growth in employment and compensation, second merger events, which included several mega-mergers of the late 1990s and early 2000s, have led to stagnation and decline in employment levels and to negative human capital outcomes with declines in wage levels.

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“…This view is additionally supported by the case study from Behar & Hodge (2007). Margolis (2006) finds evidence that mergers and acquisitions lead to a reduction in the employment particularly of (comparatively) 'low-skilled' workers, a finding that fits into this line of reason as sclerotic labour markets usually exert an overproportionally adverse effect on low-skilled labour. Altogether, this empirically strengthens the reasoning that countries with persistent involuntary unemployment and sclerotic labour markets experience negative employment effects from increasing merger activity because the employees that lose their job in the course of post-merger rationalisation cannot find a new job.…”

Section: Literature Overviewmentioning

confidence: 77%

Horizontal Mergers, Involuntary Unemployment, and Welfare

Budzinski

Kretschmer

2009

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractStandard welfare analysis of horizontal mergers usually refers to two effects: the anticompetitive market power effect reduces welfare by enabling firms to charge prices above marginal costs, whereas the procompetitive efficiency effect increases welfare by reducing the costs of production (synergies). However, demand-side effects of synergies are usually neglected. We introduce them into a standard oligopoly model of horizontal merger by assuming an (empirically supported) decrease in labour demand due to merger-specific synergies and derive welfare effects. We find that efficiency benefits from horizontal mergers are substantially decreased, if involuntary unemployment exists. However, in full employment economies, demand-side effects remain negligible. Eventually, policy conclusions for merger control are discussed.

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Should employment authorities worry about mergers and acquisitions?

Abstract: Employment, Takeovers, Linked employer–employee data, G34, J21, J23, J31, J63, L29, M51,

Cited by 20 publications

References 23 publications

Analysing the employment effects of mergers and acquisitions

Analysing the employment effects of mergers and acquisitions

Mergers, jobs, and wages in the United States telecommunications industry

Horizontal Mergers, Involuntary Unemployment, and Welfare

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