 The sectoral consequences of private equity acquisitions: Spillovers in wages and employmentKonstantinos Eleftheriou, Geoffrey Wood, Marilou Ioakimidis, Iliya Komarev and Dimitrios Thomakos Industrial Relations Journal, 2025, vol. 56, issue 1, 22-45 Abstract: Existing Industrial Relations (IR) research suggests that Private Equity (PE) takeovers may have profound effects on the target firm's industrial relations policies and practices, most notably in terms of security of tenure and relative proclivity to engage in redundancies. This study supplements the literature by exploring the effects of PE takeovers on other firms in the same industry. We find that PE takeovers increase the sensitivity of target firms to wage costs; when there is an upward pressure on wages, they respond by shedding jobs to a greater extent than their non‐acquired same‐sector competitors. However, workers in non‐acquired firms were less likely to move to a firm that had been acquired by PE, even if pay was more than sectoral rates. Even if there is a strong emphasis on restraining wage costs in the target firm, PE takeovers do not necessarily lead to the degradation of employment practices elsewhere in the sector; rather, they may provide competitors opportunities to entice talented and skilled employees from the target firm. Date: 2025 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:indrel:v:56:y:2025:i:1:p:22-45 Ordering information: This journal article can be ordered from Access Statistics for this article Industrial Relations Journal is currently edited by Peter Nolan More articles in Industrial Relations Journal from Wiley Blackwell |
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