The Elgar Companion to Social Economics, Second Edition
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The Elgar Companion to Social Economics, Second Edition

Edited by John B. Davis and Wilfred Dolfsma

Social economics is a dynamic and growing field that emphasizes the key roles social values play in the economy and economic life. This second edition of the Elgar Companion to Social Economics revises all chapters from the first edition, and adds important new chapters to reflect the expansion and development of social economics. The expert contributions explain a wide range of recent developments across different subject areas and topics in the field, mapping out possible directions of future social economic research. Social economics treats the economy and economics as embedded in a web of social and ethical relationships. It considers economics and ethics as essentially connected, and adds values such as justice, fairness, dignity, well-being, freedom, and equality to the standard emphasis on efficiency. This book will be a leading resource and guide to social economics for many years to come.
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Chapter 22: Firms, managers and restructuring: implications of a social economics view

Hans Schenk


Mergers and acquisitions (M & A) appear to have become a standard feature of modern capitalism in the Anglo-Saxon world and continental Europe. Since 1900, there have been six general M & A waves. The late-1920s wave, as well as the last two waves, growing in force between 1995–2000 and 2003–2008 respectively, have perhaps been the most exuberant. With average expenditures of more than US$1000 per annum, and many acquisitions exceeding US$50 billion in value, the two most recent waves caught many headlines in the newspapers. During M & A waves, firms on average spend much more than they do on fixed capital formation or research and development (R & D). For example, during the fifth wave business enterprise investments in acquisitions were no less than about eight times higher than business enterprise expenditures on R & D. The sixth wave, while aspiring to similar numbers as the fifth, had different characteristics, however. Similar to the fourth wave (taking place during the 1980s), a disproportionately large number of its acquisitions were leveraged buy-outs (LBOs), or in more modern parlance, private equity leveraged buy-outs (PELBOs). Many, if not most, of such buy-outs do – or are supposed to – create value from demerging previously formed concentrations, indicating a sort of continuous stop–go process, or as I would suggest and will elucidate in this chapter: indicating a restructuring wave.

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