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Who downsizes for longer? A longitudinal analysis

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  • Muñoz-Bullón, Fernando

Abstract

This contribution investigates why firms keep on downsizing once they have started to do so. From a theoretical standpoint, we develop economic and institutional explanations for explaining corporate downsizing duration. The empirical work is carried out applying event history techniques to a sample of manufacturing firms drawn from the Spanish Survey on Business Strategies from 1994 to 2005. Although results show support for persistence in downsizing over time, repeated personnel reductions is not a widespread tool in managing the workforce in this country. In addition, we find certain key corporate parameters such as profitability, temporality rate, size and employment termination costs (as well as market demand trends) to be important determinants of the continuation of on-going downsizing experiences. This is the first study on this issue using corporate-level data for Spain and multivariate methods.

Suggested Citation

  • Muñoz-Bullón, Fernando, 2008. "Who downsizes for longer? A longitudinal analysis," DEE - Working Papers. Business Economics. WB wb082805, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    • Handle: RePEc:cte:wbrepe:wb082805
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    More about this item

    Keywords

    Downsizing duration;

    JEL classification:

    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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