Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331628 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12162
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
We study the effects of corporate acquisitions on workers using Swedish administrative data and document substantial, persistent earnings losses following acquisitions. These losses reflect both displacement and wage cuts among stayers from target firms. We find no evidence that increased monopsony power accounts for these wage cuts. Instead, they are concentrated in acquisitions where the acquiring-firm CEO sat on the board of the target prior to the transaction. Such acquisitions increase acquiring-firm profits and CEO pay, without affecting total employment or revenue, consistent with rent redistribution. Overall, acquisitions reduce wages and disrupt employment, with profit gains partly extracted from workers.
Subjects: 
mergers and acquisitions
wages
layoffs
monopsony
firm performance
managers
JEL: 
G34
J23
J31
J42
J63
L25
Document Type: 
Working Paper
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