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Employment growth following takeovers

Karen Geurts and Johannes Van Biesebroeck ()

RAND Journal of Economics, 2019, vol. 50, issue 4, 916-950

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%.

Date: 2019
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https://doi.org/10.1111/1756-2171.12300

Related works:
Working Paper: Employment growth following takeovers (2017) Downloads
Working Paper: Employment growth following takeovers (2017) Downloads
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