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The Wage and Employment Consequences of Ownership Change

Year: 2013

Type: article

Abstract: This paper provides a comparative examination of the consequences of leveraged buyouts (LBOs) and corporate takeovers on employment growth and wage growth. Employing both difference‐in‐differences combined with propensity score matching and the control function approach, we find evidence that (i) wages remain unchanged after either a private equity (PE)‐backed or non‐PE‐backed LBO, (ii) wages remain unchanged after an unrelated takeover and (iii) related takeovers have negative employment consequences, possibly because of rationalisation. Our evidence does not find strong support for intervention in the market for corporate control on the grounds of protecting employees' welfare. Copyright © 2013 The Authors. Managerial and Decision Economics published by John Wiley & Sons, Ltd.

Source: Managerial and Decision Economics

DOI: 10.1002/mde.2650

Authors: Kevin Amess, Sourafel Girma, Mike Wright

Institutions: University of Nottingham, Imperial College London

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,120