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Corporate restructuring and labor productivity growth

Author

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  • Katariina Hakkala

Abstract

This article analyzes corporate restructuring and its role in generating labor productivity growth in a sample of large Swedish manufacturing corporations. It is found that external restructuring, including ownership changes, start-ups, and closures of plants, accounted for up to 47% of the productivity growth of the sample of corporations during the 1986--1996 period. The results indicate that the productivity of large multi-plant corporations potentially grew at least twice as fast as that of single-plant firms with the same internal productivity growth, thanks to their organizational flexibility. Divestitures of low productive plants were found to play a particularly important role in the replacement process generating productivity growth. The effect of external restructuring on productivity is to some extent explained by a shift toward a more skill-intensive production. Copyright 2006, Oxford University Press.

Suggested Citation

  • Katariina Hakkala, 2006. "Corporate restructuring and labor productivity growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(4), pages 683-714, August.
    • Handle: RePEc:oup:indcch:v:15:y:2006:i:4:p:683-714
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    Cited by:

    1. Simon Bruhn & Thomas Grebel & Lionel Nesta, 2023. "The fallacy in productivity decomposition," Journal of Evolutionary Economics, Springer, vol. 33(3), pages 797-835, July.
    2. Lars Schweizer & Andreas Nienhaus, 2017. "Corporate distress and turnaround: integrating the literature and directing future research," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 3-47, June.
    3. Inha Oh & Almas Heshmati & Chulwoo Baek & Jeong‐Dong Lee, 2009. "Comparative Analysis Of Plant Dynamics By Size: Korean Manufacturing," The Japanese Economic Review, Japanese Economic Association, vol. 60(4), pages 512-538, December.
    4. Lisa Östbring & Rikard Eriksson & Urban Lindgren, 2015. "Relatedness through experience: On the importance of collected worker experiences for plant performance," Papers in Evolutionary Economic Geography (PEEG) 1530, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2015.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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