Co-determination and Merger Incentives from Transfers of Wealth: Firm Owners vs. Workers
|Title:||Co-determination and Merger Incentives from Transfers of Wealth: Firm Owners vs. Workers|
Coscollá, M. Paz
Granero, Luis M.
|Journal or Publication Title:|
AUCO Czech Economic Review, 4, 2, pp. 123-139
|Uncontrolled Keywords:||Mergers, shareholders, stakeholders, worker influence, co-determination|
When workers can capture rents from their influence on corporate decisions, mergers can become a device to generate transfers of wealth. This paper examines the merger incentives from these transfers of wealth. It is found that worker influence increases merger profitability, in line with the owners’ incentive to use mergers to reduce the rents captured by workers. In contrast, the workers’ merger incentives are shown to be decreasing in their own degree of influence on the merger decision, in line with the view according to which workers can be used by incumbent managers as a defensive instrument in acquisitions.