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The Eff ects of Cross-border M&As on the Acquirers’ Domestic Performance – Firm-level Evidence

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  • Joel Stiebale
  • Michaela Trax

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Abstract

This paper provides empirical evidence on the eff ects of cross-border M&As on investing fi rms’ domestic performance in the U.K. and France. We build a new fi rm-level dataset that combines a global M&A database with balance sheet data for the years 2000–2007. Combining matching techniques with a diff erence-in-diff erences estimator, we fi nd that cross-border deals boost on average domestic employment, sales, and investment, and they are not accompanied by a downsizing of the domestic labor force in neither of both countries. Further, acquisitions in knowledge-intensive industries lead to improvements in domestic productivity. Our results display some heterogeneity across industries and types of acquisitions, suggesting a connection between the motives for international acquisitions and their resulting effects.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0159.

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Length: 39 pages
Date of creation: Jan 2010
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Handle: RePEc:rwi:repape:0159

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Keywords: Multinational fi rms; cross-border M&A; productivity; employment growth; investment;

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Citations

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Cited by:
  1. Joel Stiebale, 2014. "Cross-Border M&As and Innovative Activity of Acquiring and Target Firms," Discussion Papers 2014-06, University of Nottingham, GEP.
  2. Stiebale, Joel, 2013. "The impact of cross-border mergers and acquisitions on the acquirers' R&D — Firm-level evidence," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 307-321.
  3. Benjamin Furlan & Harald Oberhofer & Hannes Winner, 2014. "A Note on Merger and Acquisition Evaluation," WIFO Working Papers 462, WIFO.

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