Journal article
Employment Protection and Takeovers
Journal of Financial Economics, Vol.125(2), pp.369-388
01 Aug 2017
Abstract
Labor restructuring is a key driver of takeovers and the associated synergy gains worldwide. In a difference-in-differences research design, we show that major increases in employment protection reduce takeover activity by 14-27% and the combined firm gains (synergies) by over half. Consistent with the labor channel behind these effects, deals with greater potential for workforce restructuring show a greater reduction in volume, number, and synergies. The reforms do impede layoffs, and the associated wage costs match the magnitude of synergy losses. Offer prices are not fully adjusted, with both bidders and targets exhibiting lower returns following the reforms.
Dessaint, O., Golubov, A. & Volpin, P.
10.2139/ssrn.2619028
Metrics
1 Record Views
Details
- Title
- Employment Protection and Takeovers
- Creators
- O DessaintA GolubovP Volpin
- Publication Details
- Journal of Financial Economics, Vol.125(2), pp.369-388
- Publisher
- Elsevier BV
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Identifiers
- 991021861656504721