Layoff and Employment Guarantee Announcements: How Do Shareholders Respond?
AbstractEvent study methodology was used to assess the effects of both layoff and employment guarantee announcements on shareholder returns. The Wall Street Journal was used to identify 368 firms that announced layoffs and 13 firms that announced employment guarantees in 1993 or 1994. The results were used to test the validity of four hypotheses: labor-cost, efficiency, industrial-relation-effect, and signalling-effect hypotheses. The results show that both layoff announcements and employment guarantee announcements induced a decrease in the shareholder returns of the firms that made the announcements. Each of the above four models received partial support.
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Bibliographic InfoPaper provided by Department of Economics, SUNY-Oswego in its series Departmental Working Papers with number 199902.
Length: 25 pages
Date of creation: 20 Apr 1999
Date of revision: 20 Apr 1999
Contact details of provider:
Postal: Department of Economics, SUNY-Oswego, Oswego, NY 13126, U.S.
Web page: http://www.oswego.edu/~economic/
More information through EDIRC
layoffs; downsizing; event study; employment guarantee;
Find related papers by JEL classification:
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-04-27 (All new papers)
- NEP-FIN-1999-04-27 (Finance)
- NEP-LAB-1999-04-27 (Labour Economics)
- NEP-LTV-1999-05-01 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chatrath, Arjun & Ramchander, Sanjay & Song, Frank, 1995. "Are market perceptions of corporate layoffs changing?," Economics Letters, Elsevier, vol. 47(3-4), pages 335-342, March.
- Jérôme Hubler & Pierre-Xavier Meschi & Géraldine Schmidt, 2004. "Annonces de suppressions d’emplois et valeur boursière de l’entreprise," Revue Finance Contrôle Stratégie, revues.org, vol. 7(4), pages 107-142, December.
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