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Market reactions to announcements of corporate downsizing actions and implementation strategies

Title
Market reactions to announcements of corporate downsizing actions and implementation strategies
Authors
Nixon R.D.Hitt M.A.Lee H.O.-U.K.Jeong E.
Ewha Authors
이호욱
Issue Date
2004
Journal Title
Strategic Management Journal
ISSN
0143-2095JCR Link
Citation
vol. 25, no. 11, pp. 1121 - 1129
Indexed
SSCI; SCOPUS scopus
Abstract
This study examines the effects of downsizing actions and implementation strategies on market performance. While downsizing actions reduce costs, they also produce a loss of valuable human capital that can exceed the benefits resulting from the lay-offs. In support of this argument, the results showed that downsizing had a negative effect on market returns and the effects grow increasingly negative with larger downsizing actions. However, the market reacts more positively to downsizing actions when reallocation strategies are used and to large downsizing actions when disengagement incentives are applied. The results of this research suggest the importance of carefully managing valuable resources to create positive returns. Copyright © 2004 John Wiley & Sons, Ltd.
DOI
10.1002/smj.423
Appears in Collections:
경영대학 > 경영학전공 > Journal papers
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