Staying home or moving away? Restructuring efforts within multinational enterprises

Filip Abraham, Tim Goesaert, Jozef Konings

Research output: Contribution to journalArticle

Abstract

This paper analyses the impact of geographic dispersion on employment changes within multinationals. Building on earlier work of Landier et al. (2009, Review of Financial Studies 22, 3: 1119), we investigate whether corporate decision-making within a multinational is affected by the distance between an affiliate and its headquarter. Our findings suggest a detrimental impact of distance on employees, by either an increased likelihood of observing a downsizing event, or by witnessing a larger decrease in the number of employees at distant locations during downsizing events. In addition, our results seem to relate the higher likelihood of observing a downsizing event to the role of social factors on decision making. The more visible a manager is in his community, the less likely he is to downsize proximate divisions.

Original languageEnglish
Pages (from-to)765-782
Number of pages18
JournalWorld Economy
Volume37
Issue number6
DOIs
Publication statusPublished - Jun 2014

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ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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