Literature Review Women on boards and in TMTS and firm performance 121 pattern are likely to reduce shareholder value Ger pott 2007 Past studies investigate the influence of numerous factors on variations in the magnitude of the reaction Most examined factors are the sta ted reasons for the dismissals and or the purposes specified in the announcement Findings indicate that certain contents such as diminishing demand as a rationale for layoffs or the number of redun dancies relative to the total workforce are asso ciated with a stronger negative market reaction The present paper builds on Gerpott s survey I review empirical evidence from eleven publica tions on the effects of layoff announcements on shareholder wealth in the period January 2007 to December 2015 These publications cover the in vestigation period 1970 to 2012 Empirical eviden ce is mixed showing negative and positive share price reactions to layoff announcements Similarly to the publications reviewed by Gerpott the majority of subsequent studies from the peri od 2007 to 2015 analyzes announcements across several industries during a certain period and in a particular geographical region Only few studies focus on a certain industry Goins and Gruca 2008 for instance examine layoff announcements in the US oil and gas industry from 1989 to 1996 Fraun hoffer et al 2014 concentrate on announcements of workforce reductions in the global aviation in dustry during the period from 2003 to 2012 The dominance of cross sectional studies is surpri sing as there is evidence showing variations bet ween industries in the stock price reaction to layoff announcements e g Elayan et al 1998 Hallock 1998 Variations between industries are confir med for instance by Hallock 1998 who points out that certain industries stand out against the average having rather large negative abnormal returns on the announcement date including ge neral merchandise stores 1 8 percent and busi ness services 4 3 percent Likewise the results of Elayan et al 1998 vary notably for different industries While positive average abnormal returns are observed for industries such as manufactu ring process product mining and extraction or transportation and utility other industries on average experience negative and significant stock price reactions e g consumer products or ho tel business health and educational services The authors note that an alteration of a firm s human capital is likely to have a greater impact on com panies in the service industry than on those in ma nufacturing industries since the former are highly dependent on their human capital Manufacturing or transportation and utilities by contrast rely more on physical capital and are thus less sensitive to measures in the field of human resources The impact is expected to be particularly high in the personnel intensive financial services sector The following table 5 1 compliments the overview in Gerpott 2007 It presents event studies con cerned with layoff announcements and published between 2007 and 2014 Two prior studies are additionally considered because they focus on the financial sector Layoffs and shareholder wealth

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 121
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