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Workforce reduction and firm performance: Evidence from French firm data

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  • Bénédicte Reynaud

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using a large annual data base of French firms (1994-2000), this article examines the determinants of a workforce reduction of publicly-listed and non-listed companies and their consequences on firm performance. Firstly, workforce reduction appears to be a defensive response to an adverse economic shock. However, publicly-listed firms anticipate better than the others the decision to cut jobs. Secondly, using a Difference in Differences model, the estimates indicate that there has been a very small but significant improvement in the major performance indicators of the non-listed companies. For listed-companies, the estimates are no significant.

Suggested Citation

  • Bénédicte Reynaud, 2010. "Workforce reduction and firm performance: Evidence from French firm data," PSE Working Papers halshs-00564828, HAL.
    • Handle: RePEc:hal:psewpa:halshs-00564828
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00564828
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    References listed on IDEAS

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    1. Peter Cappelli, 2000. "Examining the Incidence of Downsizing and Its Effect on Establishment Performance," NBER Working Papers 7742, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Camille Signoretto & Julie Valentin, 2012. "Pratiques des employeurs en matière de licenciements : une analyse sur données d'entreprises," Documents de travail du Centre d'Economie de la Sorbonne 12049, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Camille Signoretto & Julie Valentin, 2012. "Pratiques des employeurs en matière de licenciements : une analyse sur données d'entreprises," Post-Print halshs-00719764, HAL.
    3. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Post-Print hal-03227744, HAL.
    4. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 494-495-4, pages 201-217.
    5. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03227744, HAL.
    6. Zorn, Michelle L. & Norman, Patricia M. & Butler, Frank C. & Bhussar, Manjot S., 2017. "Cure or curse: Does downsizing increase the likelihood of bankruptcy?," Journal of Business Research, Elsevier, vol. 76(C), pages 24-33.
    7. Wadesango N & Gwangwadza D C & Mhaka C & Wadesango V O, 2018. "The Impact of Labour Force Reduction on the Financial Performance of Manufacturing Companies," Journal of Economics and Behavioral Studies, AMH International, vol. 10(2), pages 20-32.

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