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Discussion Paper Details

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Title: Employment growth following takeovers

Author(s): Karen Geurts and Johannes Van Biesebroeck

Publication Date: July 2017

Keyword(s): efficiency defense, Firm Dynamics, M&A, Matching and merger

Programme Area(s): Industrial Organization

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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12167

Bibliographic Reference

Geurts, K and Van Biesebroeck, J. 2017. 'Employment growth following takeovers'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12167