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Downsizing and Profitability: An Empirical Study of Portuguese Firms in 1993¡V2005

Author

Listed:
  • Tania Marques

    (School of Technology and Management, Management for Sustainability Research Center, Polytechnic Institute of Leiria, Portugal)

  • Isabel Suarez Gonzalez

    (Department of Business Administration and Management, University of Salamanca, Spain)

  • Pedro Cruz

    (ISG Business School, CIGEST/ID+ Research Units, Lisbon/Aveiro, Portugal)

  • Manuel Portugal Ferreira

    (Polytechnic Institute of Leiria, GlobADVANTAGE¡XCenter of Research in International Business & Strategy, Portugal)

Abstract

Although firms may resort to downsizing strategies to improve financial performance, the actual outcome of downsizing is inconclusive. Testing a sample of 1,357 Portuguese firms, we conclude that firms that downsize tend to continue to underperform compared to those that do not downsize.

Suggested Citation

  • Tania Marques & Isabel Suarez Gonzalez & Pedro Cruz & Manuel Portugal Ferreira, 2011. "Downsizing and Profitability: An Empirical Study of Portuguese Firms in 1993¡V2005," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 10(1), pages 13-26, April.
  • Handle: RePEc:ijb:journl:v:10:y:2011:i:1:p:13-26
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    References listed on IDEAS

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    1. Jody Hoffer Gittell & Kim Cameron & Sandy Lim & Victor Rivas, 2005. "Relationships, Layoffs, and Organizational Resilience: Airline Industry Responses to September 11," EERI Research Paper Series EERI_RP_2005_06, Economics and Econometrics Research Institute (EERI), Brussels.
    2. Kristien Coucke & Enrico Pennings & Leo Sleuwaegen, 2007. "Employee layoff under different modes of restructuring: exit, downsizing or relocation," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 161-182, April.
    3. Kang, Jun-Koo & Shivdasani, Anil, 1997. "Corporate restructuring during performance declines in Japan," Journal of Financial Economics, Elsevier, vol. 46(1), pages 29-65, October.
    4. Peter Chalos & Charles J. P. Chen, 2002. "Employee Downsizing Strategies: Market Reaction and Post Announcement Financial Performance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(5&6), pages 847-870.
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    1. repec:bla:presci:v:96:y:2017:i:1:p:33-59 is not listed on IDEAS

    More about this item

    Keywords

    downsizing effects; downsizing performance; financial performance; Portugal;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

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