What are the Wage and Employment Consequences of Leveraged Buyouts, Private Equity and Acquisitions in the UK?

25 Pages Posted: 21 Sep 2008  

Kevin Amess

Nottingham University Business School

Sourafel Girma

Nottingham University Business School

Mike Wright

Nottingham University Business School

Date Written: September 19, 2008

Abstract

This paper provides the first comparative examination of the consequences of leveraged buyouts (LBOs) and traditional corporate acquisitions on employment and wages using a uniquely constructed panel data set covering the period 1996-2006. Employing propensity score matching combined with difference-in-differences analysis, the key findings are: (1) related and unrelated acquisitions have employment consequences of a similar magnitude, (2) related and unrelated acquisitions have the largest negative impact on employment followed by non-private equity backed LBOs, (3) acquisitions in the same industry cause an increase in wages, and (4) private equity backed LBOs have no significant impact on either employment or wages.

Keywords: Mergers, Acquisitions, Leveraged Buyouts, Private equity, Employment, Wages

JEL Classification: G34, J23, J31, L23

Suggested Citation

Amess, Kevin and Girma, Sourafel and Wright, Mike, What are the Wage and Employment Consequences of Leveraged Buyouts, Private Equity and Acquisitions in the UK? (September 19, 2008). Nottingham University Business School Research Paper No. 2008-01. Available at SSRN: https://ssrn.com/abstract=1270581 or http://dx.doi.org/10.2139/ssrn.1270581

Kevin Amess (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

HOME PAGE: http://www.nottingham.ac.uk/business/lizka1.html

Sourafel Girma

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Mike Wright

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5257 (Phone)
+44 115 951 5204 (Fax)

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