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Title:Cross-border mergers and acquisitions of multinational firms: New firm-level evidence PDF Logo
Authors:Arndt, Christian
Mattes, Anselm
Issue Date:2010
Series/Report no.:IAW-Diskussionspapiere 62
Abstract:FDI is an important channel for productivity spillovers across economies. But productivity and employment effects of cross-border mergers and acquisitions (M&A) on multinational firms are rather unclear and much disputed. We empirically analyze the effects of cross-border M&A on the performance of multinationals in Germany using new data on the firm-level. In order to control for possible selection biases we use a propensity score matching approach. We find that, first, foreign-owned multinationals are smaller but more productive than their domestic counterparts in the mean. But controlling for differences in the industrial composition and firm size, foreign-owned multinationals are larger in terms of capital, sales, and value added. The difference of total factor productivity amounts to 6 %. Second, multinationals show quite heterogeneous performances after cross-border M&A. Third, we do not find an average causal effect of cross-border M&A on the employment of the acquired multinational firm. But most importantly, the causal effect of cross-border M&A on the multinationals' productivity is positive and significant.
Subjects:FDI
Spillover
foreign ownership
cross-border M&A
productivity
employment effects
JEL:F21
F23
Document Type:Working Paper
Appears in Collections:IAW-Diskussionspapiere, Institut für Angewandte Wirtschaftsforschung (IAW)

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