Co-determination and Merger Incentives from Transfers of Wealth: Firm Owners vs. Workers
When workers can capture rents from their influence on corporate decisions, mergers can become a device to generate transfers of wealth. This paper examines the merger incentives from these transfers of wealth. It is found that worker influence increases merger profitability, in line with the owners’ incentive to use mergers to reduce the rents captured by workers. In contrast, the workers’ merger incentives are shown to be decreasing in their own degree of influence on the merger decision, in line with the view according to which workers can be used by incumbent managers as a defensive instrument in acquisitions.
Volume (Year): 4 (2010)
Issue (Month): 2 (June)
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References listed on IDEAS
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.:
- Morton I. Kamien & Israel Zang, 1987.
"The Limits of Monopolization Through Acquisition,"
754, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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"- Delegation And Mergers In Oligopoly,"
Working Papers. Serie AD
1999-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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