The Effects of Downsizing on Operating Performance
AbstractWe examine the performance of 118 firms that downsized between 1989-93. We find that downsizing firms experience declines in operating performance prior to the downsizing announcement. Operating performance improves significantly following the downsizing. These firms are able to reduce the cost of sales, labor cost, capital expenditures and R&D expenditures. We also find that firms that perform poorly in their industries prior to the downsizing and have increases in assets following the downsizing have larger improvements in performance. There is some evidence that the improvements are greater for firms that increase their focus. Copyright 2000 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Review of Quantitative Finance and Accounting.
Volume (Year): 15 (2000)
Issue (Month): 2 (September)
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Web page: http://springerlink.metapress.com/link.asp?id=102990
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- Rama, Martin & Newman, Constance, 2002. "Downsizing and productivity gains in the public and private sectors of Colombia," Policy Research Working Paper Series 2770, The World Bank.
- Dong, Xiao-yuan & Xu, Lixin Colin, 2009. "Labor restructuring in China: Toward a functioning labor market," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 287-305, June.
- José Allouche & Patrice Laroche & Florent Noël, 2008. "Restructurations et performances de l’entreprise:une méta-analyse," Revue Finance Contrôle Stratégie, revues.org, vol. 11(2), pages 105-146, June.
- Panos Desyllas, 2009. "Improving performance through vertical disintegration: evidence from UK manufacturing firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 307-324.
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