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Evidence of Fire-Sale M&A in European Transition Countries

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  • Josipa Visic

    (University of Split, Croatia)

Abstract

The aim of this paper is to determine differences in variables that create investment climate and therefore affect the values of incoming crossborder M&A in selected European transition countries. Cluster analysis for 1999 and 2007 shows that countries with unfavourable investment climate received high levels of incoming cross-border M&A. Sole country in the cluster characterised by healthy investment area (Slovenia) had the highest GDP per capita accompanied with the lowest values of incoming cross-border M&A relative to its GDP. These results could be interpreted as an evidence of fire-sale M&A in most European transition countries. In 2010, situation changed and although recession left trace, data on cross-border M&A indicate that foreign investors focused more on companies which operated in countries with healthier economy. These results indicate that a healthy investment climate is necessary to provide a sustainable economic development of a country.

Suggested Citation

  • Josipa Visic, 2012. "Evidence of Fire-Sale M&A in European Transition Countries," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(4 (Winter), pages 325-340.
    • Handle: RePEc:mgt:youmgt:v:10:y:2012:i:4:p:325-340
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    References listed on IDEAS

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    More about this item

    Keywords

    cross-border M&A; fire-sale M&A; sustainable economic development; investment climate;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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