Economic Research Report No. (ERR-13) 38 pp

December 2005

Effect of Food Industry Mergers and Acquisitions on Employment and Wages

Empirical analysis of mergers and acquisitions in eight important food industries suggests that workers in acquired plants realized modest increases in employment and wages relative to other workers. Results also show that mergers and acquisitions reduced the likelihood of plant closures while high relative labor costs encouraged plant shutdowns. These results differ from commonly held views that mergers and acquisitions lead to fewer jobs, wage cuts, and plant shutdowns.

Keywords: Food product industries, mergers and acquisitions, plant closures, structural change, food processing, consolidation, grain processing, meat slaughter, dairy processing

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