Workforce reduction and firm performance: Evidence from French firm data

Pre-print, Working paper: Using a large annual data base of French firms (1994-2000), this article examines the determinants of a workforce reduction of publicly-listed and non-listed companies and their consequences on firm performance. Firstly, workforce reduction appears to be a defensive response to an adverse economic shock. However, publicly-listed firms anticipate better than the others the decision to cut jobs. Secondly, using a Difference in Differences model, the estimates indicate that there has been a very small but significant improvement in the major performance indicators of the non-listed companies. For listed-companies, the estimates are no significant.

Author(s)

Bénédicte Reynaud

Date of publication
  • 2010
Keywords JEL
C14 D21 G14 J63 L25
Keywords
  • Worforce reduction
  • Layoff
  • Financial performance
  • Return on equity
  • Selection bias
Internal reference
  • PSE Working Papers n°2010-05
Version
  • 1