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Employment effects of mergers and acquisitions in the United States by sector

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  • Nadia Doytch
  • Franklin Mixon
  • Kamal Upadhyaya

Abstract

This article studies the employment effects of mergers and acquisitions in the manufacturing, financial and service sectors of the US economy using annual time series data from 1978 to 2008. An empirical model is developed in which average wages per hour and the total value of mergers and acquisitions are the explanatory variables, with the number of people employed as the dependent variable. Before estimating the model, the time series properties of the data are diagnosed. The estimated results suggest that mergers and acquisitions have helped to increase employment in both the short-run as well as in the long-run in all three sectors of the economy. To ensure the robustness of the finding, a panel data set is created and the model is re-estimated using the fixed effects estimator. The finding is consistent with the sectoral results.

Suggested Citation

  • Nadia Doytch & Franklin Mixon & Kamal Upadhyaya, 2011. "Employment effects of mergers and acquisitions in the United States by sector," Applied Economics Letters, Taylor & Francis Journals, vol. 18(10), pages 925-928.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:10:p:925-928
    DOI: 10.1080/13504851.2010.515200
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    References listed on IDEAS

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    1. Phillips, P C B, 1987. "Time Series Regression with a Unit Root," Econometrica, Econometric Society, vol. 55(2), pages 277-301, March.
    2. Shleifer, Andrei & Vishny, Robert W., 2003. "Stock market driven acquisitions," Journal of Financial Economics, Elsevier, vol. 70(3), pages 295-311, December.
    3. Nadia Doytch & Merih Uctum, 2012. "Sectoral Growth Effects of Cross-Border Mergers and Acquisitions," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(3), pages 319-330.
    4. Phillips, P C B, 1987. "Time Series Regression with a Unit Root," Econometrica, Econometric Society, vol. 55(2), pages 277-301, March.
    5. Harford, Jarrad, 2005. "What drives merger waves?," Journal of Financial Economics, Elsevier, vol. 77(3), pages 529-560, September.
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    Cited by:

    1. Méndez Ortega, Carles, & Teruel, Mercedes, 2018. "To acquire or not to acquire: Mergers and Acquisitions in the Software Industry," Working Papers 2072/307043, Universitat Rovira i Virgili, Department of Economics.

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