Cross-border Acquisitions and Labor Regulations / Ross Levine, Chen Lin, Beibei Shen.

Format:

Book

Author/Creator:

Levine, Ross.

Contributor:

National Bureau of Economic Research.

Lin, Chen.

Shen, Beibei.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21245.

NBER working paper series no. w21245

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Do labor regulations influence the reaction of stock markets and firm profitability to cross-border acquisitions? We discover that acquiring firms enjoy smaller abnormal stock returns and profits when targets are in countries with stronger labor protection regulations, i.e., in countries where laws, regulations, and policies increase the costs to firms of adjusting their workforces. These effects are especially pronounced when the target is in a labor-intensive or high labor-volatility industry. Consistent with labor regulations shaping the success of cross-border deals, we find that firms make fewer and smaller cross-border acquisitions into countries with strong labor regulations.

Notes:

Print version record

June 2015.