IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Efficiency gains and foreign takeovers: remoteness matters

  • Olivier Bertrand
  • Habib Zitouna

This paper investigates the effects of horizontal acquisitions on the productive efficiency of target firms in the 1990s. Using French manufacturing firm-level data, we implement appropriate difference-in-difference estimation techniques associated to a matching propensity score procedure. We found that foreign takeovers increase the total factor productivity of French target firms. This effect is similar, but more important for non-European operations. Going one step further, we show that the performance of acquisition is related to the cultural, institutional, geographic and economic distance between the foreign owner and its newly French affiliate. It is stated that operating in remote cultural and institutional environments lead to performance-enhancing synergies to the greatest benefit of the acquired firm. But, geographic distance seems to have a negative impact. It is true for both European and non-European mergers. As for the economic distance, our results suggest that a higher gap in sectorial TFP enhances the post-acquisition productivity of target firms especially for European acquisitions. However, distance in market size does not look to matter. These findings put forward the importance of remoteness as a key factor in explaining the performance of international acquisitions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.inderscience.com/link.php?id=23148
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Banking, Accounting and Finance.

Volume (Year): 1 (2009)
Issue (Month): 4 ()
Pages: 314-339

as
in new window

Handle: RePEc:ids:injbaf:v:1:y:2009:i:4:p:314-339
Contact details of provider: Web page: http://www.inderscience.com/browse/index.php?journalID=277

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ids:injbaf:v:1:y:2009:i:4:p:314-339. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.