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Performance of domestic and cross-border acquisitions: Empirical evidence from Russian acquirers

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  • Bertrand, Olivier
  • Betschinger, Marie-Ann

Abstract

This paper investigates the long-term impact of domestic and international acquisitions, initiated by Russian firms, on their operating performance. In general, acquisitions can be associated with synergy gains, internalization advantages, and higher market power. Acquisitions, however, may also give rise to agency problems as well as new integration and organizational costs, leading to an ambiguous overall impact on the performance of acquirers. Based on a sample of more than 600 acquirers we show that both domestic and international acquisitions tend to reduce the performance of acquirers compared to non-acquiring firms. Examining how different deal, firm and industry level characteristics moderate the value destroying effects of acquisitions, our results suggest that Russian acquirers suffer from the inability to leverage value due to low M&A experience and capability, especially when making international acquisitions.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 40 (2012)
Issue (Month): 3 ()
Pages: 413-437

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Handle: RePEc:eee:jcecon:v:40:y:2012:i:3:p:413-437

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: M&A; Restructuring; FDI; Emerging countries; Russia;

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Cited by:
  1. Helena Schweiger & Guido Friebel, 2013. "Management Quality, Ownership, Firm Performance and Market Pressure in Russia," Open Economies Review, Springer, vol. 24(4), pages 763-788, September.
  2. Iwasaki, Ichiro, 2014. "Global financial crisis, corporate governance, and firm survival:," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 178-211.
  3. Joel Stiebale, 2014. "Cross-Border M&As and Innovative Activity of Acquiring and Target Firms," Discussion Papers 2014-06, University of Nottingham, GEP.

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