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Employment growth following takeovers

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  • Geurts, Karen
  • Van Biesebroeck, Johannes

Abstract

We use a comprehensive sample of takeovers in Belgium to show that they are remarkably common and an important part of many firms' growth process. They affect both small and large firms and, over a five-year period, 17 percent of private employment. We estimate the impact of takeovers on employment growth of the merged entity using an empirical framework that explicitly takes into account that mergers are formed by pairs of firms. It allows for post-merger employment outcomes that are heterogeneous and determined jointly by the characteristics of both partners. The average merger is estimated to reduce employment by 8% over a four-year period, but the contraction can be three times as large for some types of mergers, while employment expands for other types.

Suggested Citation

  • Geurts, Karen & Van Biesebroeck, Johannes, 2017. "Employment growth following takeovers," CEPR Discussion Papers 12167, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12167
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    References listed on IDEAS

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    More about this item

    Keywords

    efficiency defense; Firm Dynamics; M&A; Matching; merger;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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