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The Employment Effects of Mergers in a Declining Industry: The Case of South African Gold Mining

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  • Behar Alberto

    ()
    (University of Oxford, Centre for the Study of African Economies)

  • Hodge James

    ()
    (Genesis Analytics)

Abstract

With data from the South African gold mining industry, we find evidence consistent with theories that mergers and acquisitions allow for the shedding of excess labor. Mergers are arguably exogenous in our sample, while an industry in decline can provide a good setting for testing the theories. The data clearly portray rises in real wages and falling employment after the end of apartheid. We find evidence of a significant negative effect of mergers/acquisitions on employment. The magnitude is similar to the effect in Continental Europe and larger than the effect in the United States. This supports the view that negative employment impacts are more likely in rigid labor markets.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 8 (2008)
Issue (Month): 1 (August)
Pages: 1-20

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Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:29

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Cited by:
  1. Oliver Budzinski & Jürgen-Peter Kretschmer, 2009. "Horizontal Mergers, Involuntary Unemployment, and Welfare," MAGKS Papers on Economics 200907, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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