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The Impact Of Ownership Change On Employment, Wages, And Labor Productivity In U.S. Manufacturing 1977-87

  • Sang V Nguyen
  • Robert H Mcguckin
  • Arnold P Reznek

This paper reports on the impact of ownership change on productivity, wages, and employment in U.S. food manufacturing for the period 1977-87. Our analysis is based on both firm and plant level data taken from the U. S. Census Bureau's Longitudinal Research Database (LRD). Three principal results emerge from the analysis. First, ownership change is positively associated with productivity and wage growth, although the effects are significantly smaller for large plants. Second, ownership change appears to be associated with increases, not decreases, in employment at operating plants. Third, plants changing ownership show a greater likelihood of survival than those that do not change owners. These findings run counter to the notion that mergers and acquisitions cut wages and reduce employment. Finally, neither of the first two results are observed when firm level data are used for the analysis. This suggests that firm level data hide important dynamic activities within the firm. Thus, plant level data are necessary for studying the structure and performance of firms over time.

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File URL: ftp://ftp2.census.gov/ces/wp/1995/CES-WP-95-08.pdf
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 95-8.

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Date of creation: Apr 1995
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Handle: RePEc:cen:wpaper:95-8
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  1. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
  2. Sang V Nguyen & Robert H Mcguckin, 1993. "On Productivity and Plant Ownership Change: New Evidence From the LRD," Working Papers 93-15, Center for Economic Studies, U.S. Census Bureau.
  3. Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 1994. "Downsizing and Productivity Growth: Myth or Reality?," NBER Working Papers 4741, National Bureau of Economic Research, Inc.
  4. Timothy Dunne & Mark J Roberts, 1993. "The Long-Run Demand for Labor: Estimates From Census Establishment Data," Working Papers 93-13, Center for Economic Studies, U.S. Census Bureau.
  5. Mueller, Dennis C, 1969. "A Theory of Conglomerate Mergers," The Quarterly Journal of Economics, MIT Press, vol. 83(4), pages 643-59, November.
  6. Sang V Nguyen & Edward C Kokkelenberg, 1988. "Modelling Technical Progress And Total Factor Productivity: A Plant Level Example," Working Papers 88-4, Center for Economic Studies, U.S. Census Bureau.
  7. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
  8. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
  9. Robert H Mcguckin & Peter Zadrozny, 1988. "Long-Run Expectations And Capacity," Working Papers 88-1, Center for Economic Studies, U.S. Census Bureau.
  10. Sang V Nguyen & Robert H Mcguckin & Stephen H Andrews, 1990. "The Relationships Among Acquiring And Acquired Firms' Product Lines," Working Papers 90-12, Center for Economic Studies, U.S. Census Bureau.
  11. Matsusaka, John G, 1993. "Target Profits and Managerial Discipline during the Conglomerate Merger Wave," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 179-89, June.
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