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Who downsizes for longer? A longitudinal analysis

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  • Fernando Munoz-Bullon

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Abstract

This contribution investigates why firms keep on downsizing once they have started to do so. From a theoretical standpoint, we develop economic and institutional explanations for explaining corporate downsizing duration. The empirical work is carried out applying event history techniques to a sample of manufacturing firms drawn from the Spanish Survey on Business Strategies from 1994 to 2005. Although results show support for persistence in downsizing over time, repeated personnel reductions is not a widespread tool in managing the workforce in this country. In addition, we find certain key corporate parameters such as profitability, temporality rate, size and employment termination costs (as well as market demand trends) to be important determinants of the continuation of on-going downsizing experiences. This is the first study on this issue using corporate-level data for Spain and multivariate methods.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb082805.

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Date of creation: Jun 2008
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Handle: RePEc:cte:wbrepe:wb082805

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Keywords: Downsizing duration; Spain; Organizational learning; Manufacturing firms; Temporary contracts; Employment termination costs;

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