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Employment Effects of Acquisitions: Evidence from Acquired European Firms

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  • Harald Oberhofer

Abstract

This paper examines the employment effects of acquisitions for acquired European firms, taking non-random selection of acquisition targets explicitly into account. Following the empirical firm growth literature and theories put forward in the mergers and acquisition (M&A) literature, we control for convergence dynamics in firm size and distinguish between different types of acquisitions. Empirically, we estimate an endogenous treatment model using accounting data for a newly created sample of acquired and non-acquired European firms. Our results reveal positive employment effects for different types of acquisitions indicating that M&As likely induce efficiency gains. Copyright Springer Science+Business Media, LLC. 2013

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  • Harald Oberhofer, 2013. "Employment Effects of Acquisitions: Evidence from Acquired European Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 345-363, May.
    • Handle: RePEc:kap:revind:v:42:y:2013:i:3:p:345-363
    DOI: 10.1007/s11151-012-9353-9
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    Cited by:

    1. Jesús Cuaresma & Harald Oberhofer & Gallina Vincelette, 2014. "Institutional barriers and job creation in Central and Eastern Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-29, December.
    2. Margarita Carvalho & João Cerejeira, 2019. "Mergers and Acquisitions and wage effects in the Portuguese banking sector," NIPE Working Papers 07/2019, NIPE - Universidade do Minho.
    3. Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 0. "Multinational enterprises, industrial relatedness and employment in European regions," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1165-1205.
    4. Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 2020. "Multinational enterprises, industrial relatedness and employment in European regions [Innovation: mapping the winds of creative destruction]," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1165-1205.
    5. Benjamin Furlan & Harald Oberhofer & Hannes Winner, 2016. "A note on merger and acquisition evaluation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(3), pages 447-455.
    6. Burger, Anže & Hogan, Teresa & Kotnik, Patricia & Rao, Sandeep & Sakinç, Mustafa Erdem, 2023. "Does acquisition lead to the growth of high-tech scale-ups? Evidence from Europe," Research in International Business and Finance, Elsevier, vol. 64(C).
    7. Oberhofer, Harald & Stöckl, Matthias & Winner, Hannes, 2012. "The wage premium of globalization: Evidence from European mergers and acquisitions," Economics Discussion Papers 2012-6, Kiel Institute for the World Economy (IfW Kiel).
    8. Rathner, Sebastian, 2012. "The Performance of Socially Responsible Investment Funds: A Meta-Analysis," Working Papers in Economics 2012-3, University of Salzburg.
    9. Chen, Sheng-Syan & Hsu, Ching-Yu & Huang, Chia-Wei, 2016. "The white squire defense: Evidence from private investments in public equity," Journal of Banking & Finance, Elsevier, vol. 64(C), pages 16-35.
    10. Verhoest, Koen & Petersen, Ole Helby & Scherrer, Walter & Murwantara Soecipto, Raden, 2014. "Policy commitment, legal and regulatory framework, and institutional support for PPP in international comparison: Indexing countries’ readiness for taking up PPP," Working Papers in Economics 2014-3, University of Salzburg.
    11. Todd, Kevin & Heining, Jörg, 2024. "The labor market impacts of employer consolidation: Evidence from Germany," Labour Economics, Elsevier, vol. 87(C).
    12. Amit Soni & Avinash Chandra & Sumati Varma, 2020. "Impact of M&As on Employment in the Indian Information Technology (IT) Industry," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 311-329, June.
    13. Rathner, Sebastian, 2013. "The Relative Performance of Socially Responsible Investment Funds. New Evidence from Austria," Working Papers in Economics 2013-1, University of Salzburg.
    14. Loretz, Simon & Oberhofer, Harald, 2014. "When Helping the Small Hurts the Middle: Beer Excise Duties and Market Concentration," Working Papers in Economics 2014-5, University of Salzburg.
    15. Elisa Roncagliolo & Francesco Avallone, 2021. "The complexity in measuring M&A performance: Is a multi-dimensional approach enough?," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2021(1), pages 89-117.
    16. Harald Oberhofer, 2013. "Employment Effects of Acquisitions: Evidence from Acquired European Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 345-363, May.

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    More about this item

    Keywords

    Merger and acquisitions; Employment effects; Firm growth; Gibrat’s law; Endogenous treatment model;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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