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 language | English |
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Pages (from-to) | 765-782 |
Number of pages | 18 |
Journal | World Economy |
Volume | 37 |
Issue number | 6 |
DOIs | |
Publication status | Published - Jun 2014 |
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
- Political Science and International Relations