The Dynamic Impacts of M&A on Employment in Japan: Using Micro-data from the Financial Statements Statistics of Corporations by Industry

Hiroyuki Taguchi (), Taichi Yanagawa and Masashi Harita

Microeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper provides empirical evidence on the effects of mergers and acquisitions (M&A) on employment in Japan. It contributes to the literature by capturing dynamic employment impacts of various types of M&A using the latest micro data of firms financial statements. Our main findings are : the dynamic effect of firm acquisitions on a target firms employment proved to be significantly positive mainly in the manufacturing sector, while the dynamic effect of mergers on a remaining firms employment turned out to be significantly negative mainly in the non-manufacturing sector. The switching pattern from negative impact to positive impact on a target firms employment in the dynamic post-acquisition process appeared more clearly in the domestic acquisition case than in the cross-border acquisition case for the manufacturing sector. We speculate that the dynamic positive employment effect of firm acquisitions reflects the efficiency gains by a firms management improvements in the post-acquisition process, whereas the dynamic negative employment effect of mergers implies organizational rationalization in the post-merger process.

Keywords: M&A; firm acquisitions; mergers; dynamic employment effects (search for similar items in EconPapers)
JEL-codes: D21 M51 (search for similar items in EconPapers)
Date: 2010-01
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Citations: View citations in EconPapers (1)

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