The Labor Market Consequences of Acquisitions https://d.repec.org/n?u=RePEc:ces:ceswps:_12162&r=&r=ind
"… the consequences of corporate acquisitions for workers and find that they are far from neutral: earnings decline through both job displacement and wage cuts among stayers from target firms. These wage cuts do not reflect increased monopsony power. Instead, they are concentrated in acquisitions where the acquirer’s CEO sat on the target’s board prior to the transaction, suggesting insider knowledge of pay policies.
… such CEOs disproportionately acquire high-paying firms and subsequently reduce wages. The result is rent redistribution from workers to shareholders and managers, as seen in higher profits and CEO pay. These findings imply that the labor-market risks of acquisitions arise not only from greater market concentration, as documented in previous work, but also from managerial incentives that conventional antitrust policies are ill-equipped to address."
#LaborEcon #wages #IndustrialOrganization

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

Bird transmitter packing pr0n. So neatly arranged. ❤️
#edc #IndustrialOrganization #knolling

Labor share and market power in European firms https://d.repec.org/n?u=RePEc:pra:mprapa:123442&r=&r=lma
"firms’ product and labor market power, as reflected in product markups and labor markdowns, enable firms to capture a larger share of economic output at the expense of workers.
… empirical analysis shows that markdowns are negative correlated with labor share, as firms reduce employment and suppress #wages below the marginal revenue of labor.
Product markups exhibit a dual effect: they can positively influence the labor share by increasing wages and employment when firms reinvest additional profits into production expansion. … markups indirectly reduce the labor share due to their positive link with labor markdowns. Firms with significant pricing power often suppress wages and limit hiring, diminishing the labor share.
… empirical results reveal the presence of a hump-shaped relationship between product markups and labor share. Initially, as product markups increase, the labor share rises, but this trend reverses when markups reach high levels. This nonlinearity underscores the dual nature of markups: while moderate markups have a direct positive effect on labor share, mitigating labor markdowns, high markups enable firms to exert substantial #monopsony power, diminishing the labor share.
The analysis reveals significant cross-country #heterogeneity in the effects of markups and markdowns on the labor share."
#IndustrialOrganization #LaborMarkets

Why Don’t EU Firms Innovate? The Hidden Costs of Failure https://conversableeconomist.com/2024/12/18/why-dont-eu-firms-innovate-the-hidden-costs-of-failure/
"… high firing costs tend to direct R&D investment towards mature products rather than new ones. In an open economy, countries with high levels of employment protection tend to specialize in well established industries and leave #innovation of new products to countries with less employment protection.
… restructuring costs (that include much more than severance packages) are approximately 10 times higher in countries with high labor protection, such as in Western Europe, than in countries with low labor protection such as in the United States"
#LaborMarkets #IndustrialOrganization

Tuition too high? Blame competition https://arxiv.org/pdf/2405.17762
"… #competition between academic institutions for resources & #reputation leads to #tuition escalation that negatively affects students.
… rankings, a capital campaign, facilities improvements, and an excellence campaign increase college tuition, institutional debt, and expenditures per student; only the scenario of ignoring the #rankings decreases these measures"
#IndustrialOrganization

Technological Shocks & Algorithmic Decision Aids in #CredenceGoods Markets http://d.repec.org/n?u=RePEc:arx:papers:2401.17929&r=ain
"…high-ability experts may forego decision aid in order to differentiate themselves from low-ability experts
…experiment supports hypothesis: high-ability experts are less likely than low-ability experts to invest into an algorithmic decision aid
…pervasive under-investments, & no effect on expert #honesty"
#ExperimentalEcon #ai #IndustrialOrganization

Acquihiring for Monopsony Power http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_500&r=lma
"… the goal of such acquihires might be to shut down the most relevant labor market competitor. This grants the acquirer #monopsony power over specialized talent. As a consequence, acquihiring may harm employees and be socially inefficient."
#LaborMarkets #IndustrialOrganization #wages