Cross-border acquisitions and employment policies

Using novel firm-level data on employment quality in an international sample of M&A deals, this paper investigates the cost-benefit trade-off faced by acquirers when providing generous employment policies. We find that shareholders react more positively to deal announcements by acquirers providi...

Full description

Saved in:
Bibliographic Details
Main Authors: LIANG, Hao, RENNEBOOG, Luc, VANSTEENKISTE, Cara
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2020
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6528
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7527/viewcontent/Cross_border_acquisitions_and_employment_policies_SV.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
id sg-smu-ink.lkcsb_research-7527
record_format dspace
spelling sg-smu-ink.lkcsb_research-75272021-04-15T02:28:45Z Cross-border acquisitions and employment policies LIANG, Hao RENNEBOOG, Luc VANSTEENKISTE, Cara Using novel firm-level data on employment quality in an international sample of M&A deals, this paper investigates the cost-benefit trade-off faced by acquirers when providing generous employment policies. We find that shareholders react more positively to deal announcements by acquirers providing generous employee incentives when the deal is domestic, but negatively when the deal is cross-border. These effects are primarily driven by the provision of monetary incentives and are strongest for firms in skilled industries. We argue that generous employment policies increase synergy gains and reduce labor adjustment costs in a domestic takeover. In cross-border deals, however, costs associated with managing employee policies across borders and lack of opportunities for eliminating work duplication negatively affect acquirer returns. Nevertheless, we find that country-specific acquisition experience can mitigate these negative effects. Our results cannot be explained by country-level labor regulations or by target-level employment policies. 2020-06-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6528 info:doi/10.1016/j.jcorpfin.2020.101575 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7527/viewcontent/Cross_border_acquisitions_and_employment_policies_SV.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Workforce integration Cross-border mergers and acquisitions Employment policy Job security Monetary incentives Takeovers Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Workforce integration
Cross-border mergers and acquisitions
Employment policy
Job security
Monetary incentives
Takeovers
Corporate Finance
spellingShingle Workforce integration
Cross-border mergers and acquisitions
Employment policy
Job security
Monetary incentives
Takeovers
Corporate Finance
LIANG, Hao
RENNEBOOG, Luc
VANSTEENKISTE, Cara
Cross-border acquisitions and employment policies
description Using novel firm-level data on employment quality in an international sample of M&A deals, this paper investigates the cost-benefit trade-off faced by acquirers when providing generous employment policies. We find that shareholders react more positively to deal announcements by acquirers providing generous employee incentives when the deal is domestic, but negatively when the deal is cross-border. These effects are primarily driven by the provision of monetary incentives and are strongest for firms in skilled industries. We argue that generous employment policies increase synergy gains and reduce labor adjustment costs in a domestic takeover. In cross-border deals, however, costs associated with managing employee policies across borders and lack of opportunities for eliminating work duplication negatively affect acquirer returns. Nevertheless, we find that country-specific acquisition experience can mitigate these negative effects. Our results cannot be explained by country-level labor regulations or by target-level employment policies.
format text
author LIANG, Hao
RENNEBOOG, Luc
VANSTEENKISTE, Cara
author_facet LIANG, Hao
RENNEBOOG, Luc
VANSTEENKISTE, Cara
author_sort LIANG, Hao
title Cross-border acquisitions and employment policies
title_short Cross-border acquisitions and employment policies
title_full Cross-border acquisitions and employment policies
title_fullStr Cross-border acquisitions and employment policies
title_full_unstemmed Cross-border acquisitions and employment policies
title_sort cross-border acquisitions and employment policies
publisher Institutional Knowledge at Singapore Management University
publishDate 2020
url https://ink.library.smu.edu.sg/lkcsb_research/6528
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7527/viewcontent/Cross_border_acquisitions_and_employment_policies_SV.pdf
_version_ 1770575149801668608