Employment growth following takeovers
Year: 2019
Type: article
Abstract: We construct a comprehensive sample of takeovers in Belgium that shows they are remarkably common. Takeovers involve both small and large firms and, over a five‐year period, 17% of private sector employment. We estimate their impact on employment growth using a framework that explicitly takes into account that takeovers involve pairs of firms and that post‐merger outcomes are heterogeneous. The average merger temporarily reduces employment of the combined entity by −1.4%. Mergers likely to be motivated by market power show a stronger and permanent employment reduction of −14%, whereas those motivated by efficiency gains lead to employment expansions of +10%.
Source: The RAND Journal of Economics
Authors: Karen Geurts, Johannes Van Biesebroeck
Institution: KU Leuven
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2745697729