Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141498
Authors: 
Friebel, Guido
Heinz, Matthias
Zubanov, Nikolay
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9739
Abstract: 
We estimate the effect of downsizing announcement on workplace performance using data from a German bakery chain of 193 shops. Faced with intensified competition, the firm decided to sell or close down 57 of its worst performing shops. We identify the effect of downsizing from a plausibly exogenous variation in the timing of the sale or closure announcement in the individual shops. We find that the announcements of the shop being sold to a new owner and being closed down reduce sales by six and 21 percent, respectively. The negative effect of downsizing increases with the share of workers with a permanent contract, even though permanent workers faced a much lower unemployment risk. We relate our findings to the literatures on downsizing and psychological contract.
Subjects: 
downsizing
psychological contract
retail
teams
statistical analysis
JEL: 
M12
M54
Document Type: 
Working Paper

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