Do Foreign Mergers & Acquisitions Boost Firm Productivity?
AbstractThis paper examines the causal relationship between foreign mergers and acquisitions and firm productivity in the UK over the period 1999-2007. Our results raise questions about the existence of aggregate effects of foreign ownership on TFP in the longer-run. However, we find significant heterogeneity in the TFP effects of foreign M&A at the industry level. Overall, we uncover a systematic pattern of post-acquisition TFP effects that is consistent with the most recent theoretical models of firm heterogeneity and cross-border mergers and acquisitions as mode of foreign entry. Furthermore, we find positive aggregate effects on labor productivity due to capital deepening but not due to changes in TFP.
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Bibliographic InfoPaper provided by Economic and Social Research Institute (ESRI) in its series Papers with number DYNREG47.
Length: 40 pages
Date of creation: 2009
Date of revision:
Cross-border mergers and acquisitions; Productivity; Firm heterogeneity;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-30 (All new papers)
- NEP-BEC-2009-08-30 (Business Economics)
- NEP-COM-2009-08-30 (Industrial Competition)
- NEP-EFF-2009-08-30 (Efficiency & Productivity)
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