The Wage and Employment Consequences of Ownership Change

Amess, Kevin; Girma, Sourafel; Wright, Mike

Abstract

This paper provides a comparative examination of the consequences of leveraged buyouts (LBOs) and corporate takeovers on employment growth and wage growth. Employing both difference-in-differences combined with propensity score matching and the control function approach, we find evidence that (i) wages remain unchanged after either a private equity (PE)-backed or non-PE-backed LBO, (ii) wages remain unchanged after an unrelated takeover and (iii) related takeovers have negative employment consequences, possibly because of rationalisation. Our evidence does not find strong support for intervention in the market for corporate control on the grounds of protecting employees' welfare. © 2013 The Authors. Managerial and Decision Economics published by John Wiley & Sons, Ltd.

Citation

Amess, K., Girma, S., & Wright, M. (2014). The Wage and Employment Consequences of Ownership Change. Managerial and Decision Economics, 35(2), 161-171. https://doi.org/10.1002/mde.2650

• Journal Article Type: Article
• Acceptance Date: May 13, 2013
• Online Publication Date: Sep 23, 2013
• Publication Date: 2014-03
• Deposit Date: Mar 27, 2014
• Publicly Available Date: Mar 27, 2014
• Journal: Managerial and Decision Economics
• Print ISSN: 0143-6570
• Electronic ISSN: 1099-1468
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 35
• Issue: 2
• Pages: 161-171
• DOI: https://doi.org/10.1002/mde.2650
• Public URL: https://nottingham-repository.worktribe.com/output/717603
• Publisher URL: http://onlinelibrary.wiley.com/doi/10.1002/mde.2650/abstract
• Contract Date: Mar 27, 2014