This paper provides a systematic empirical analysis of the effects of merger and acquisition activity on profitability and firm-level employee remuneration in the UK, using a specially constructed database for the period 1979-91. It finds that both profitability and wages rise following acquisition, and firms that merge within the same industry division experience larger increases in profitability and pay their workers higher wages than those engaged in unrelated acquisitions; i.e. in part, the result of an increase in the efficiency with which labour is used following related acquisition.
{"title":"Do Wages Rise or Fall Following Merger?","authors":"M. Conyon, S. Girma, S. Thompson, P. Wright","doi":"10.2139/ssrn.546962","DOIUrl":"https://doi.org/10.2139/ssrn.546962","url":null,"abstract":"This paper provides a systematic empirical analysis of the effects of merger and acquisition activity on profitability and firm-level employee remuneration in the UK, using a specially constructed database for the period 1979-91. It finds that both profitability and wages rise following acquisition, and firms that merge within the same industry division experience larger increases in profitability and pay their workers higher wages than those engaged in unrelated acquisitions; i.e. in part, the result of an increase in the efficiency with which labour is used following related acquisition.","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123849357","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate whether business cycle dynamics in seven industrialized countries (the G7) are characterized by asymmetries in conditional mean. We provide evidence on this issue using a variety of time series models. Our approach is fully parametric. Our testing strategy is robust to any conditional heteroskedasticity, outliers, and/or long memory that may be present. Our results indicate fairly strong evidence of nonlinearities in the conditional mean dynamics of the GDP growth rates for Canada, Germany, Italy, Japan, and the US. For France and the UK, the conditional mean dynamics appear to be largely linear. Our study shows that while the existence of conditional heteroskedasticity and long memory does not have much effect on testing for linearity in the conditional mean, accounting for outliers does reduce the evidence against linearity.
{"title":"On Business Cycle Asymmetries in G7 Countries","authors":"Khurshid M. Kiani, Prasad V. Bidarkota","doi":"10.2139/ssrn.447880","DOIUrl":"https://doi.org/10.2139/ssrn.447880","url":null,"abstract":"We investigate whether business cycle dynamics in seven industrialized countries (the G7) are characterized by asymmetries in conditional mean. We provide evidence on this issue using a variety of time series models. Our approach is fully parametric. Our testing strategy is robust to any conditional heteroskedasticity, outliers, and/or long memory that may be present. Our results indicate fairly strong evidence of nonlinearities in the conditional mean dynamics of the GDP growth rates for Canada, Germany, Italy, Japan, and the US. For France and the UK, the conditional mean dynamics appear to be largely linear. Our study shows that while the existence of conditional heteroskedasticity and long memory does not have much effect on testing for linearity in the conditional mean, accounting for outliers does reduce the evidence against linearity.","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134646707","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent literature on international technology diffusion has demonstrated the positive effect in foreign country productivity on the domestic economy. Using a sample of Organization for Economic Co-operation and Development (OECD) manufacturing industries we search for evidence that the effect of this foreign technology varies according to the level of absorptive capacity and physical distance. We find evidence that both help to explain differences in the level of productivity across countries, but that absorptive capacity is quantitatively more important. Physical distance had a greater effect at the start of the time period and in industries in which trade is local and technology is high-tech.
{"title":"Frontier Technology, Absorptive Capacity and Distance","authors":"R. Kneller","doi":"10.2139/ssrn.411941","DOIUrl":"https://doi.org/10.2139/ssrn.411941","url":null,"abstract":"Recent literature on international technology diffusion has demonstrated the positive effect in foreign country productivity on the domestic economy. Using a sample of Organization for Economic Co-operation and Development (OECD) manufacturing industries we search for evidence that the effect of this foreign technology varies according to the level of absorptive capacity and physical distance. We find evidence that both help to explain differences in the level of productivity across countries, but that absorptive capacity is quantitatively more important. Physical distance had a greater effect at the start of the time period and in industries in which trade is local and technology is high-tech.","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"450 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127608503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper adapts Uhlig's [Journal of Monetary Economics (2005) forthcoming] sign restriction identification methodology to investigate the effects of UK monetary policy using a structural vector autoregression (VAR). It shows that shocks which can reasonably be described as monetary policy shocks have played only a small role in the total variation of UK monetary and macroeconomic variables. Most of the variation in UK monetary variables has been due to their systematic reaction to other macroeconomic shocks, namely non-monetary aggregate demand, aggregate supply, and oil price shocks. We also find, without imposing any long run identifying restrictions, that aggregate supply shocks have permanent effects on output.
{"title":"Leaning into the Wind: A Structural VAR Investigation of UK Monetary Policy","authors":"A. Mountford","doi":"10.2139/ssrn.340360","DOIUrl":"https://doi.org/10.2139/ssrn.340360","url":null,"abstract":"This paper adapts Uhlig's [Journal of Monetary Economics (2005) forthcoming] sign restriction identification methodology to investigate the effects of UK monetary policy using a structural vector autoregression (VAR). It shows that shocks which can reasonably be described as monetary policy shocks have played only a small role in the total variation of UK monetary and macroeconomic variables. Most of the variation in UK monetary variables has been due to their systematic reaction to other macroeconomic shocks, namely non-monetary aggregate demand, aggregate supply, and oil price shocks. We also find, without imposing any long run identifying restrictions, that aggregate supply shocks have permanent effects on output.","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"80 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126336324","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The long-run and short-run structure of the Danish manufacturing export sector is analyzed within a cointegrated vector autoregressive model. The price variables of the analysis can be characterized as integrated of second order, I(2), but long-run homogeneity seems to cancel the I(2)-trend allowing the analysis of a transformed data set to take place within the cointegrated I(1)-framework. Two long-run relations are found and identified as a demand-relation for Danish exports and a polynomially cointegrated price relation. In the price formation a large weight to foreign prices and an effect from the rate of inflation to the steady-state markup are found. The latter effect is interpreted as an element of caution in the price setting in an inflationary environment. To characterize the short-run behavior of the Danish export-sector a structural representation of the model is developed. Copyright 2002 by Blackwell Publishing Ltd
{"title":"An I(2)Cointegration Analysis of Price and Quantity Formation in Danish Manufactured Exports","authors":"Heino Bohn Nielsen","doi":"10.2139/ssrn.1791705","DOIUrl":"https://doi.org/10.2139/ssrn.1791705","url":null,"abstract":"The long-run and short-run structure of the Danish manufacturing export sector is analyzed within a cointegrated vector autoregressive model. The price variables of the analysis can be characterized as integrated of second order, I(2), but long-run homogeneity seems to cancel the I(2)-trend allowing the analysis of a transformed data set to take place within the cointegrated I(1)-framework. Two long-run relations are found and identified as a demand-relation for Danish exports and a polynomially cointegrated price relation. In the price formation a large weight to foreign prices and an effect from the rate of inflation to the steady-state markup are found. The latter effect is interpreted as an element of caution in the price setting in an inflationary environment. To characterize the short-run behavior of the Danish export-sector a structural representation of the model is developed. Copyright 2002 by Blackwell Publishing Ltd","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2001-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117309166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The work of Levine and Renelt (1992) and Sala-i-Martin (1997a, b) which attempted to test the robustness of various determinants of growth rates of per capita GDP among countries using two variants of Edward Leamerâ??s extreme-bounds analysis is reexamined. In a realistic Monte Carlo experiment in which the universe of potential determinants is drawn from those in Levine and Reneltâ??s study, both versions of the extreme-bounds analysis are evaluated for their ability to recover the true specification. Levine and Reneltâ??s method is shown to have low size and extremely low power: nothing is robust; while Sala-i-Martinâ??s method is shown to have high size and high power: it is undiscriminating. Both methods are compared to a cross-sectional version of the generalto-specific search methodology associated with the LSE approach to econometrics. It is shown to have size near nominal size and high power. Sala-i-Martinâ??s method and the general-to-specific method are then applied to the actual data from the original two studies. The results are consistent with the Monte Carlo results and are suggestive that the factors that most affect differences of growth rates are ones that are beyond the control of policymakers.
{"title":"Truth and Robustness in Cross-Country Growth Regressions","authors":"K. Hoover, S. Perez","doi":"10.2139/ssrn.258608","DOIUrl":"https://doi.org/10.2139/ssrn.258608","url":null,"abstract":"The work of Levine and Renelt (1992) and Sala-i-Martin (1997a, b) which attempted to test the robustness of various determinants of growth rates of per capita GDP among countries using two variants of Edward Leamerâ??s extreme-bounds analysis is reexamined. In a realistic Monte Carlo experiment in which the universe of potential determinants is drawn from those in Levine and Reneltâ??s study, both versions of the extreme-bounds analysis are evaluated for their ability to recover the true specification. Levine and Reneltâ??s method is shown to have low size and extremely low power: nothing is robust; while Sala-i-Martinâ??s method is shown to have high size and high power: it is undiscriminating. Both methods are compared to a cross-sectional version of the generalto-specific search methodology associated with the LSE approach to econometrics. It is shown to have size near nominal size and high power. Sala-i-Martinâ??s method and the general-to-specific method are then applied to the actual data from the original two studies. The results are consistent with the Monte Carlo results and are suggestive that the factors that most affect differences of growth rates are ones that are beyond the control of policymakers.","PeriodicalId":212630,"journal":{"name":"Wiley-Blackwell: Oxford Bulletin of Economics & Statistics","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2000-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127385680","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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