Employee lay-off under different modes of restructuring
In recent years, there has been a growing concern about the effect of globalisation on employment in most West European countries. More and more firms had to drastically restructure their operations in order to survive the rise in global competition. Restructuring often leads to a collective lay-off of employees. We use a theoretical model to examine how firm and industry characteristics have an impact on different modes of restructuring. (1) Close down part of its activities and relocate abroad, (2) Downsizing through a significant decrease in employees or (3) Dismiss all employees and exit the market. Using a unique sample of Belgian firms reporting collective layoffs, we test empirically the predictions of the model. Relocating firms are found to be most profitable among the restructuring firms, have invested more in the recent past, operate in sectors with significant economies of scale and belong more often to a multinational group than firms opting for downsizing or exit. Downsizing firms are more capital intensive than relocating firms, while exiting firms are less profitable, smaller, younger and more labour intensive than downsizing or relocating firms. Note
|Date of creation:||14 Jul 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +32 9 210 98 99
Fax: +32 9 210 97 00
Web page: http://www.vlerick.com
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:vlg:vlgwps:2005-13. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle Vandenbroere)
If references are entirely missing, you can add them using this form.