Staying home or moving away? Restructuring efforts within multinational enterprises

Filip Abraham, Tim Goesaert, Jozef Konings

Research output: Contribution to journalArticlepeer-review

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

ASJC Scopus subject areas

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

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