Literature Review Women on boards and in TMTS and firm performance116 performance and thus continuously strive to reduce operating costs ECB 2015 The question arises whether collective dismissals by exchange listed financial institutions are in the interest of their shareholders Value oriented cor porate management is a central task for leaders of companies active on the international capital mar kets whereby value means primarily shareholder value Key objective is the sustainable increase of the company s equity value The equity s market value is reflected in the share price Capital mar kets evaluate management s decisions and actions based on this premise of an increase in value Ma nagement actions may take the form of merger and acquisitions entry in new markets or areas of business as well as staff related measures The latter are frequently staff reductions in the course of restructuring with the objective of cutting costs Empirical evidence indicates that changes in cost efficiency are associated with changes in the stock price Cost efficiency is likely to be rewarded with outperformance of the stock price relative to in efficient counterparts Beccalli Casu Giradone 2006 The aim of this paper is to investigate the effects of layoff announcements by US American and Eu ropean banks on shareholder wealth over the pe riod 2004 to 2014 Furthermore I will examine if these effects differ depending on the strictness of national labor law To my knowledge no study to date has conducted such an investigation In addi tion I aim at addressing the question what factors generally drive investors assessment of bank lay offs The findings of investigations into the factors that influence capital markets perception of layoff announcements and thus direction and magnitude of the share price reaction are of importance for both management and shareholders Moreover shareholders form only one group of a corpora tions stakeholders that comprise customers sup pliers the public or employees Focusing solely on the shareholders interest regularly conflicts with acting in the interest of other stakeholders With regard to layoffs one could argue that sharehol ders benefit at the expense of employees Fraun hoffer Mietzner Schiereck Schneider 2014 Results are significant also in terms of this debate The remainder of the paper is structured as follows section 5 2 gives an introduction into the specific characteristics of the banking sector Section 5 3 presents previous research findings and develops the research hypotheses Section 5 4 describes the data set and section 5 5 explains the methodology while section 5 6 presents the empirical results and its implications Finally section 5 7 summarizes the main findings and concludes 5 2 Background the banking sector 5 2 1 Banking sector characteristics The banking sector is characterized by a series of specific features that make it a particularly inte resting subject of study Firstly there are major differences in the balance sheet structure of banks and nonfinancial firms The asset structure is fun damentally different While nonfinancial firms hold physical assets such as inventories and machines financial intermediaries hold financial claims as as sets Greenbaum Thakor 1995 With regard to liabilities and equity on the balance sheet the es sential difference between financial intermediaries and other types of business is that the former tend to be more leveraged equity ratios are particularly low Typically very low levels of equity capitaliza tion and off balance sheet liabilities increase banks systematic risks Second while non ser vice providers rather rely on their physical capital firms from the services sector including financial Layoffs and shareholder wealth

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 116
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