Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects

Oldford, Erin; Otchere, Isaac

doi:10.1016/j.pacfin.2016.06.001

Cited by 12 publications

(16 citation statements)

References 63 publications

(74 reference statements)

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“…The result of this study is not consistent with the results of some past studies that found improved labor productivity immediately after the merger transaction (Conyon et al, 2002;Siegel and Simons, 2010;Bandick and Karpaty, 2011;Furlan et al, 2016;Oldford and Otchere, 2016;Schiffbauer et al, 2017) or, in general, an important negative effect after mergers (Lehto and Bockerman, 2008;Hosono et al, 2009;Weche, 2015). All-in-all, as mergers have not any employment effect in the post-merger period of the acquiring firms, the earlier stated proposition of the hypothesis H 1 is accepted.…”

Section: Evaluation Of Merger Effects On Employment and Labor Productcontrasting

confidence: 99%

“…Their final sample consists of 362 firms acquired in cross-border M&As and 342 firms acquired by domestic bidders. Oldford and Otchere (2016) presented financial data analysis for each target firm five years before and five years after the completion of their deal. Their results implied that the targets reduced employment levels and increased wages after the acquisitions, while productivity and efficiency improved significantly after the foreign acquisition.…”

Section: Literature Reviewmentioning

confidence: 99%

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Assessing employment effects of mergers using accounting measures: Some evidence from Greece in the period of economic crisis

Giovanis¹,

Pantelidis²,

Pazarskis³

et al. 2017

J. Account. Taxation

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This study analyzed the interdependencies between employment and accounting measures, in order to evaluate the merger effects during the period of the economic crisis in Greece. More specifically, the study analyses five accounting measures in comparison to the total number of employees, as financial ratios, from a sample of all Greek listed firms in the Athens Exchange that executed one merger in the period from 2009 to 2013 as acquirers. From the analysis of the results, it is clear that the mergers had no effect on employment and labor productivity for the whole sample firms merged from 2009 to 2013 and the productivity of workers have not improved significantly after the mergers. Lastly, the study examined the industry differentiation of labor productivity after mergers. The results reveal, in general, a better performance for the commerce and services (CMS) firms from the sample in contrast to the three other basic industry categories: Primary sector (PRI), industrial sector (IND), and constructions and building materials (CNΒ).

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Section: Evaluation Of Merger Effects On Employment and Labor Productcontrasting

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Assessing employment effects of mergers using accounting measures: Some evidence from Greece in the period of economic crisis

Giovanis¹,

Pantelidis²,

Pazarskis³

et al. 2017

J. Account. Taxation

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show abstract

“…Ramírez‐Alesón and Espitia‐Escuer () reported that increased international diversification is associated with performance improvements. Oldford and Otchere () and Almeida () find that there is a wage premium involved in cross‐border acquisitions, as foreign bidders typically increase wages after the acquisition. The increase in wages is typically accompanied by an increase in efficiency and productivity levels (Oldford & Otchere, ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…Some studies report positive announcement returns (e.g., Chari, Ouimet, & Tesar, ), other studies report negative returns (e.g., Danbolt, ), while another group of studies report insignificant abnormal returns (e.g., Campa & Hernando, ). Studies investigating the post‐acquisition performance also report mixed evidence, with some studies reporting improved performance for the firms in the long run (e.g., Oldford & Otchere, ), and others reporting underperformance (e.g., Gugler, Mueller, Yurtoglu, & Zulehner, ). There is little research on whether cross‐border acquisitions hinder or promote firm‐level competitiveness in the host country.…”

Section: Introductionmentioning

confidence: 99%

Cross‐border acquisitions and host country competitiveness

Otchere

Oldford

2018

Business Fin & Account

Self Cite

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We investigate the competitive effects of cross‐border takeovers and find that following the acquisitions, the competitiveness of cross‐border targets improves. The results for industry rivals, however, are mixed. Rivals of targets of cross‐border acquisitions experience improvements in their competitive position in the long term, while at the same time, their growth and market share suffer. These acquisitions lead to a shifting of market share from rivals to cross‐border targets, which is suggestive of increased industry concentration. Cross‐border acquisitions also enhance the host country's financial market development, and lead to increases in innovation in the host country. Overall, our results cast some doubts on the often pessimistic view of foreign takeovers held by some politicians that these deals are bad for the host country.

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“…Canadian cross‐border M&A activities have been increasing over time, including the Canadian takeovers of well‐established foreign firms (Oldford and Otchere, ). Based on their literature review, Xie et al () conclude that the United States, United Kingdom, Japan, France, and Canada are the top five acquiring firm countries in the market for cross‐border outbound deals and that the United States, United Kingdom, Canada, the Netherlands, and Germany are the top five target firm countries for cross‐border inbound acquisitions.…”

Section: Manda Researchmentioning

confidence: 99%

Firms in Transition: A Review of the Venture Capital, IPO, and M&A Literature

Cormier

Coulombe

Gutiérrez

et al. 2018

Accounting Perspectives

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A key area of research focuses on firms in transition, particularly those going public via initial public offerings, those growing via venture capital infusions, and acquirers and targets in merger and acquisition deals. In this article, we provide a review of research regarding firms in transition, with a primary focus on accounting‐related research. As part of our review we include key contributions both in the Canadian context and internationally, and discuss areas to be considered for future research.

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Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects

Cited by 12 publications

References 63 publications

Assessing employment effects of mergers using accounting measures: Some evidence from Greece in the period of economic crisis

Assessing employment effects of mergers using accounting measures: Some evidence from Greece in the period of economic crisis

Cross‐border acquisitions and host country competitiveness

Firms in Transition: A Review of the Venture Capital, IPO, and M&A Literature

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