Abstract
ABSTRACT This study examines the impact of layoff announcement on firm performance for immigrant-founder firms. Specifically, I examine the difference of financial performance between immigrant-founder companies and non-immigrant-founder companies over the three-year period surrounding layoffs. The study documents that immigrant-founder companies announcing downsizing, on average, perform better than non-immigrant-founder companies prior to and in the year of employee layoff announcement, but perform worse after the year of layoff announcement. Market responds positively to value-enhancing layoff announcements from both immigrant-founder and non-immigrant-founder companies. It implies that companies, especially immigrant-founder companies with deteriorating financial performance, are more likely to implement value-enhancing layoffs to avoid eliciting a negative stock price response that leads to decreased executive equity-based compensation. Keywords Layoff, Immigrant-founder firms, Firm Performance.
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