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

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  • Olivier Bertrand

    ()
    (Graduate School of Management, St. Petersburg State University)

  • Marie-Ann Betschinger

    (Higher School of Economics)

Abstract

This paper investigates the impact of domestic and international acquisitions initiated by Russian firms on their operating performance. In general, acquisitions can be associated with synergy gains, internalisation advantages and higher market power. However, acquisitions may also give rise to agency problems as well as new integration and organisational 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 limited M&A experience and capability, especially when making international acquisitions.

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Bibliographic Info

Paper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 129.

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Length: 41 pages
Date of creation: Jun 2011
Date of revision:
Publication status: Published in Working papers 129, European Bank for Reconstruction and Development
Handle: RePEc:ebd:wpaper:129

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

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Cited by:
  1. Iwasaki, Ichiro, 2014. "Global financial crisis, corporate governance, and firm survival:," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 178-211.
  2. 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.
  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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