Implicit contracts and acquisitions: An econometric case study of the 19th century Australian banking industry

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It has been argued that hostile takeovers redistribute wealth from workers to shareholders by enabling the acquiring firm to revoke implicit contracts. This paper uses micro-data from personnel records to examine the consequences of the Union Bank of Australia’s 1892 takeover of the Bank of South Australia. The evidence confirms that the lifetime earnings of older workers at the BSA declined because of the merger. They faced a high probability of losing their jobs immediately following the merger, lost specific human capital due to the closure of branches, faced a flatter salary profile over the remainder of their career, and received a reduced pension.
Original languageEnglish
Pages (from-to)185-208
Number of pages24
JournalGerman Journal of Human Resource Management: Zeitschrift für Personalforschung
Issue number2
Early online date6 Jan 2017
Publication statusPublished - 1 May 2017

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