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

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Author Info
Alberto Behar (University of Oxford, Centre for the Study of African Economies)
James Hodge (Genesis Analytics)

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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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File URL: http://www.bepress.com/cgi/viewcontent.cgi?article=1945&context=bejeap
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Publisher Info
Article provided by Berkeley Electronic Press in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 8 (2008)
Issue (Month): 1 ()
Pages:
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Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:29

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Related research
Keywords: employment; mergers; breach of trust;

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Find related papers by JEL classification:
G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

References listed on IDEAS
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This page was last updated on 2009-12-20.

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