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Does the origin matter? The effects of cross-border mergers and acquisitions in France

Author

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  • Federico Carril-Caccia

Abstract

Purpose - The present article analyses the effects of cross-border mergers and acquisitions (CBM&As) on targets' total factor productivity (TFP), employment, wages and intangible-asset investment. The author investigates whether the impact of CBM&As differs depending on the origin of the investing multinational (MNE). The author distinguishes between CBM&As from European countries, other developed countries and emerging countries. Design/methodology/approach - The author makes use of a unique firm-level data set of foreign direct investment in the French manufacturing sector. The authors applies propensity score matching and difference in differences to estimate the effect of CBM&As. Findings - The results show that the consequences of CBM&As differ strongly depending on the origin. CBM&As from European MNEs have a positive impact on TFP, wages and intangible-asset investment, and those from emerging countries seem to increase wages and intangible-asset investments. In contrast, CBM&As that originate from MNEs from other developed countries do not have a significant effect. Originality/value - This article contributes to the growing literature on the effects of foreign direct investment that highlights the relevance of accounting for the MNEs' origin. In particular, it is the first to address the impact of emerging-country MNEs' CBM&As in Europe.

Suggested Citation

  • Federico Carril-Caccia, 2020. "Does the origin matter? The effects of cross-border mergers and acquisitions in France," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 16(8), pages 2136-2154, July.
    • Handle: RePEc:eme:ijoemp:ijoem-10-2019-0823
    DOI: 10.1108/IJOEM-10-2019-0823
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    More about this item

    Keywords

    Cross-border M&As; Emerging countries; Europe; Firm performance; TFP; D24; F23; F60; G34;
    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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