The effects of the national setting on employment practice: The case of downsizing

Marc Goergen, Chris J Brewster, Geoffrey Wood

Research output: Contribution to journalArticleResearchpeer-review

26 Citations (Scopus)

Abstract

Although there is now a sizeable body of academic literature that tries to explain cross-country differences in terms of corporate control, capital market development, investor protection and politics, there is as yet very little literature on the degrees of protection accorded to other corporate stakeholders such as employees, based on a systematic comparison of firm level evidence. We find that both theories of legal origin and the varieties of capitalism approach are poor predictors of the relative propensity of firms to make redundancies in different settings. However, the political orientation of the government in place and even more so the nature of the electoral system are relatively good explanators of this propensity. In other words, political structures and outcomes matter more than more rigid institutional features such as legal origin. We explore the reasons for this, drawing out the implications for both theory and practice.

Original languageEnglish
Pages (from-to)1051-1067
Number of pages17
JournalInternational Business Review
Volume22
Issue number6
DOIs
Publication statusPublished - Dec 2013
Externally publishedYes

Keywords

  • Capitalist systems
  • Corporate governance systems
  • Downsizing
  • Employment practices
  • Mergers and acquisitions

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