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Do Union Wealth Concessions Explain Takeover Premiums? The Evidence on Contract Wages

  • Joshua Rosett
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    I estimate changes in levels of union real wage growth associated with corporate takeovers and accompanying chief executive officer changes. The effects are statistically insignificant. The results are used to construct union wealth changes associated with corporate control events. Target fire shareholder wealth premiums are estimated using a simple market model. The union and shareholder wealth changes are compared, and I conclude that transfers of wealth from unions to shareholders ate not an economically significant explanation of shareholder wealth premiums.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3187.

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    Date of creation: Nov 1989
    Date of revision:
    Publication status: published as JFEC, Vol. 27, no. 1 (1990): 263-282.
    Handle: RePEc:nbr:nberwo:3187
    Note: LS ME
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. Charles Brown & James L. Medoff, 1988. "The Impact of Firm Acquisitions on Labor," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 9-32 National Bureau of Economic Research, Inc.
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    3. Roll, Richard, 1986. "The Hubris Hypothesis of Corporate Takeovers," The Journal of Business, University of Chicago Press, vol. 59(2), pages 197-216, April.
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    5. Lichtenberg, F.R. & Siegel, D., 1989. "The Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel," Papers fb-_89-05, Columbia - Graduate School of Business.
    6. Eckbo, B Espen & Wier, Peggy, 1985. "Antimerger Policy under the Hart-Scott-Rodino Act: A Reexamination of the Market Power Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 28(1), pages 119-49, April.
    7. Ruback, Richard S., 1983. "Assessing competition in the market for corporate acquisitions," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 141-153, April.
    8. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    9. 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.
    10. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
    11. Bradley, Michael & Desai, Anand & Kim, E. Han, 1988. "Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms," Journal of Financial Economics, Elsevier, vol. 21(1), pages 3-40, May.
    12. Frank R. Lichtenberg & Donald Siegel, 1987. "Productivity and Changes in Ownership of Manufactoring Plants," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 643-684.
    13. Kaplan, Steven, 1989. " Management Buyouts: Evidence on Taxes as a," Journal of Finance, American Finance Association, vol. 44(3), pages 611-32, July.
    14. Andrei Shleifer & Lawrence H. Summers, 1987. "Breach of Trust in Hostile Takeovers," NBER Working Papers 2342, National Bureau of Economic Research, Inc.
    15. Eckbo, B Espen, 1985. "Mergers and the Market Concentration Doctrine: Evidence from the Capital Market," The Journal of Business, University of Chicago Press, vol. 58(3), pages 325-49, July.
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