The impact of ownership changes: a view from labor markets

Previous studies of mergers and acquisition often focus on firms' performan ce such as profits, productivity and market shares. However, from a broad c ompetition policy perspective, the impacts on labor and wages are crucial. In this study, we use plant-level data for the entire US manufacturing sect or for the period 1977-87 to examine the effects of ownership changes on em ployment, wages and plant closing. Our principal findings are that ownershi p changes are not a primary vehicle for cuts in employment and wages, or cl osing plants. Instead, the typical ownership change increases jobs and thei r quality as measured by wages. However, some ownership changes, particular ly those in bigger plants, are associated with job loss, and the typical wo rker fares much worse than the typical plant. Finally, we find that plants that changed owners have a higher probability of survival than those that d id not. Overall, the impact of ownership changes on labor markets are posit ive. (C) 2001 Elsevier Science B.V. All rights reserved.