Workforce reductions and post-merger operating performance: The role of corporate governance

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Məlikov K., Demirbag M., Kuvandikov A., Manson S.

Journal of Business Research, vol.122, pp.109-120, 2021 (SSCI, Scopus)

• Nəşrin Növü: Article / Article
• Cild: 122
• Nəşr tarixi: 2021
• Doi nömrəsi: 10.1016/j.jbusres.2020.08.042
• jurnalın adı: Journal of Business Research
• Jurnalın baxıldığı indekslər: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, Business Source Elite, Business Source Premier, CAB Abstracts, INSPEC, Psycinfo, Public Affairs Index, Veterinary Science Database
• Səhifə sayı: pp.109-120
• Açar sözlər: Corporate governance, Merger and acquisition, Post-acquisition operating performance, Workforce reductions
• Açıq Arxiv Kolleksiyası: Məqalə
• Adres: Bəli

Qısa məlumat

This paper examines whether corporate governance mechanisms influence the association between workforce reductions and post-acquisition operating performance. Using UK-based acquisitions, it is found that there is a negative relationship between employment reductions and post-acquisition operating performance. However, the results show that this negative association becomes positive when the board has a substantial equity ownership. This suggests acquirers with higher levels of board ownership make better quality layoff decisions and, thereby, achieve operating performance improvement subsequent to workforce reductions. The results also indicate that larger board size and greater board independence decrease the negative effect of acquisition-related workforce reductions on subsequent operating performance. Further, our results show that CEO duality increases the negative relationship between employment reductions and post-acquisition operating performance. Overall, the results suggest that corporate governance plays an important role in understanding the performance effect of acquisition-related workforce reductions.