Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73156
Authors: 
Weche-Gelübcke, John P.
Year of Publication: 
2012
Series/Report no.: 
University of Lüneburg Working Paper Series in Economics 240
Abstract: 
This study focuses on ex ante performance of domestic and foreign takeover targets in Germany, one of the most important FDI inflow destinations worldwide. Using a new database from German official statistics, unconditional comparisons as well as binary response model estimations of takeover probabilities were performed for the manufacturing and service sector separately. The results showed a diametrically opposing impact of productivity and profitability on the takeover likelihood. This offers a conciliation of two supposedly opponent hypotheses, known as 'cherry-picking' and 'lemon-grabbing'. The results advocate assumptions of asset-exploiting and information asymmetries in favor of domestic investors but differ only marginally between foreign and domestic targets.
Subjects: 
Foreign ownership
Germany
acquisition
firm performance
services
inward FDI
multinational firms
productivity
JEL: 
F21
F23
G34
Document Type: 
Working Paper

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