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The effects of cross-border acquisitions on firms' productivity in the EU

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This study empirically investigates the extent to which firms in the European Union, once acquired through a cross-border acquisition, show different productivity levels as compared to those firms that have not been acquired. Our identification strategy relies on the combination of Propensity Score Matching and the Staggered Difference-in-Difference estimator, using firms' balance sheet for the years 2008-2018. We find that cross-border acquisitions decrease the productivity of the acquired firms, especially in the manufacturing and services sectors, as well as in less knowledge intensive activities. Firms targeted by acquirers originating in emerging market economies also experience a negative effect on productivity.

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  • Gregori, Wildmer Daniel & Martinez Cillero, Maria & Nardo, Michela, 2021. "The effects of cross-border acquisitions on firms' productivity in the EU," JRC Working Papers in Economics and Finance 2021-06, Joint Research Centre, European Commission.
    • Handle: RePEc:jrs:wpaper:202106
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    More about this item

    Keywords

    Cross-border M&As; FDI; TFP; European Union; Propensity Score Matching; DiD;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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