Papers Containing Keywords(s): 'takeover'
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Sang V Nguyen - 3
Viewing papers 21 through 23 of 23
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Working PaperTHE RELATIONSHIPS AMONG ACQUIRING AND ACQUIRED FIRMS' PRODUCT LINES
September 1990
Working Paper Number:
CES-90-12
This study develops detailed information on the relationships among the activities of acquiring and acquired firms at and near the time of merger for a sample of 94 takeovers undertaken between 1977-1982. We focus on takeovers for two reasons. First, takeovers are an important and controversial phenomenon. Second, takeovers allow us to look at marginal changes, admittedly large ones, in the firm's boundaries. Thus, they provide a useful way of examining relationships among activities of the firm without having to go into great detail regarding the historical decisions that generated the firm's current structure. While the individual establishment is our basic data unit, in this study we aggregate the activities of the firm to the line of business (LOB) level. Each LOB of an acquired firm is classified as to its relationship horizontal, vertical (upstream or downstream), and conglomerate to the LOBs of the acquiring firm. Using these categorizations we aggregate the LOB-level information to the firm level to investigate the degree to which our sample of mergers is specialized to particular types of relationships. While we find a significant group of unspecialized takeovers, most appear to fit a specific category. We also look at the pattern of closed operations immediately following the takeover. Closings are generally concentrated in operations involving horizontal relationships. Finally, we consider the pattern of relationships between hostile and friendly takeovers and whether takeover premiums vary by type of merger. Merger premiums are not related to the type of relationship between the acquiring and acquired firm, but they are tied to whether the takeover is friendly or hostile.View Full Paper PDF
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Working PaperThe Effects Of Leveraged Buyouts On Productivity And Related Aspects Of Firm Behavior
July 1989
Working Paper Number:
CES-89-05
We investigate the economic effects of leveraged buyouts (LBOs) using large longitudinal establishment and firm-level Census Bureau data sets linked to a list of LBOs compiled from public data sources. About 5 percent, or 1100, of the manufacturing plants in the sample were involved in LBOs during 1981-1986. We find that plants involved in LBOs had significantly higher rates of total-factor productivity (TFP) growth than other plants in the same industry. The productivity impact of LBOs is much larger than our previous estimates of the productivity impact of ownership changes in general. Management buyouts appear to have a particularly strong positive effect on TFP. Labor and capital employed tend to decline (relative to the industry average) after the buyout, but at a slower rate than they did before the buyout. The ratio of nonproduction to production labor cost declines sharply, and production worker wage rates increase, following LBOs. LBOs are production-labor-using, nonproduction-labor-saving, organizational innovations. Plants involved in management buyouts (but not in other LBOs) are less likely to subsequently close than other plants. The average R&D- intensity of firms involved in LBOs increased at least as much from 1978 to 1986 as did the average R&D-intensity of all firms responding to the NSF/Census survey of industrial R&D.View Full Paper PDF
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Working PaperThe Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel
June 1989
Working Paper Number:
CES-89-03
Recent high rates of takeover activity have stimulated considerable interest and concern among policymakers and the public about changes in corporate ownership, but relatively little evidence about the "read" (as opposed to financial) effects of takeovers has been available. This paper presents evidence concerning the effects of ownership change on the employment and wages of central-office workers -- according to some views, those likely to be most affected by takeovers -- and contracts them with the effects on manufacturing plant employees. The evidence is based on a large, longitudinal, plant-level data set derived from Census Bureau surveys of both administrative and production establishments. The major findings of the analysis are as follows. Central offices that changed owners between 1977 and 1982 had substantially lower -- about 16 percent lower -- employment growth during that period than central offices not changing owners. (There was, however, no significant difference in the growth of R&D employment.) They also had slower growth in wages -- about 9 percent lower. Changing owners had a much more negative effect on employment growth in central offices than it did in manufacturing plants: 16 percent compared to 5 percent. This implies that the ratio of central-office to plant employees declines about 11 percent in firms changing owners: about 7.2 administrators per 10-00 plant employees are eliminated. These findings are consistent with the view that reduction of administrative overhead is an important motive for changes in ownership. Failure to account for reductions in central-office employment results in a substantial (about 40 percent) underestimate of the productivity gains associated with ownership change. We also provide evidence concerning the relationship between firm size and administrative-intensity.View Full Paper PDF
