Wealth Destruction on a Massive Scale? A Study of Acquiring‐Firm Returns in the Recent Merger Wave

Acquiring‐firm shareholders lost 12 cents around acquisition announcements per dollar spent on acquisitions for a total loss of $240 billion from 1998 through 2001, whereas they lost $7 billion in all of the 1980s, or 1.6 cents per dollar spent. The 1998 to 2001 aggregate dollar loss of acquiring‐firm shareholders is so large because of a small number of acquisitions with negative synergy gains by firms with extremely high valuations. Without these acquisitions, the wealth of acquiring‐firm shareholders would have increased. Firms that make these acquisitions with large dollar losses perform poorly afterward.     

Productive Restructuring and ‘Standardization’ in Mexican Horticulture: Consequences for Labour

In this paper we discuss how the establishment of strict quality and food safety norms for horticulture to satisfy the current consumer demands has forced enterprises to invest in modifying their productive processes. In the light of the unavoidable trend in favour of consumers, we analyze the precarious situation of farm workers, a situation that is not in tune with the concept of decent work promoted by the International Labour Organization or with the Social Accountability Standard promoted by the United Nations. We conclude that the enterprises have achieved major progress in productive restructuring to comply with quality standards, but at the expense of their workers' salaries and living and working conditions. This contradiction between the well‐being of the consumer and the misery of the worker is a fundamental characteristic explaining the current success of globalized agro‐food systems.     

Financial Reporting Quality and Wage Differentials: Evidence from Worker-Level Data

We examine whether financial reporting quality affects worker wages using employer-employee matched data in the United States. We find that low financial reporting quality is associated with a compensating wage differential—that is, a risk premium—using three distinct approaches while controlling for worker characteristics by (1) regressing wages on firm-year–level and firm-level reporting quality, (2) documenting wage changes when workers switch firms, and (3) estimating a structural approach that separates reporting quality from performance-related volatility. We find evidence consistent with two channels: performance pay and turnover risk, where workers bear risks from noise in performance measurement and unemployment, respectively. To mitigate endogeneity concerns, we show that—after the accounting scandals in 2002 and after the announcements of an internal control weakness (ICW)—former Arthur Andersen clients and ICW firms pay wage premiums to employees, with magnitudes between 0.9% and 2.8% of annual wages.