Article ID: | iaor201111970 |
Volume: | 44 |
Issue: | 3 |
Start Page Number: | 957 |
End Page Number: | 990 |
Publication Date: | Aug 2011 |
Journal: | Canadian Journal of Economics/Revue canadienne d'conomique |
Authors: | Stiebale Joel, Trax Michaela |
Keywords: | statistics: inference, knowledge management |
This paper provides empirical evidence on the effects of cross‐border mergers and acquisitions (M&As) on the acquiring firms’ domestic performance in the U.K. and France. We build a new firm‐level data set that combines a global M&A database with balance sheet data for the years 2000 to 2007. Combining matching techniques with a difference‐in‐differences estimator, we find that cross‐border M&As boost on average acquirers’ domestic sales and investment, and they are not accompanied by a downsizing of the domestic labour force in either country. Further, cross‐border M&As 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 M&As and their resulting effects.