The Relationship between Downsizing and Stock Performance: The Moderating Effect of Industrial Concentration and Growth Opportunity

• Main Authors: Ping Yuan Liu, 劉平原
• Other Authors: Cheng-Shou Lu
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/03468893054077483792

碩士 === 國立高雄應用科技大學 === 商務經營研究所 === 100 === Human resources are the major asset of the industry and personnel cost is also huge one. The companies can improve operational efficiency through streamlining of redundant staff. However, the companies may reduce costs when poor operating performance, this action can lead the negative impact to the company and even affect the future stock price performance by contrast. This study aimed to investigate the degree of industrial concentration and growth opportunities affecting the company's human streamline decision-making and stock performance during 1996-2010, and it consists of 5,089 samples. This study shows the Herfindahl index-the degree of industrial concentration and the market to book ratio proxy for growth opportunites. The empirical results indicate that the higher the company of industrial concentration, the lower the degree of downsizing. The growth opportunities do not affect the company's workforce to streamline decision-making. Finally, the study also pointed out that the company’s downsizing has a negative impact on the stock performance of the next annual. But if the company is higher industrial concentration, it can effectively reduce the negative evaluation of the investors in human streamline. In addition, the higher of the growth opportunities that will improve human streamline on decision-negative effect of stock prices. It means that the higher degree of industrial concentration, the more competitive advantage companies enjoy, and they were less likely taking the layoff decisions; once streamlining investors will give a relatively positive evaluation. The future growth opportunities decide the value of company. When company fund is raised the company's human streamling activities are possible, investors will view it as a meticulous business plan and reduce the negative impact of downsizing.