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Evaluating the Effects of External Takeover on the Performance of Regional Companies: The Case of Scotland, 1965 to 1980

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  • B Ashcroft
  • J H Love

Abstract

A framework is suggested for the evaluation of the effects of external takeover on regional economic performance, and an approach is offered to identify the impact of takeover on the performance of the acquired firm. The approach is then applied to estimate the effects of external takeover on the performance of Scottish manufacturing companies between 1965 and 1980. The results show that external takeover improved sales performance but lowered rates of return in acquired firms. Employment was, in general, unaffected. Overall, the effects on acquired firms are judged to have been beneficial, but evidence of harmful effects on the wider regional economy suggests that it cannot be assumed that such takeovers will not be against the public interest.

Suggested Citation

  • B Ashcroft & J H Love, 1989. "Evaluating the Effects of External Takeover on the Performance of Regional Companies: The Case of Scotland, 1965 to 1980," Environment and Planning A, , vol. 21(2), pages 197-220, February.
    • Handle: RePEc:sae:envira:v:21:y:1989:i:2:p:197-220
    DOI: 10.1068/a210197
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    References listed on IDEAS

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    1. G. Rosenbluth, 1970. "The Relation between Foreign Control and Concentration in Canadian Industry," Canadian Journal of Economics, Canadian Economics Association, vol. 3(1), pages 14-38, February.
    2. Steven Globerman, 1979. "Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 42-56, February.
    3. Ashcroft, Brian K, 1988. "External Takeovers in Scottish Manufacturing: The Effect on Local Linkages and Corporate Functions," Scottish Journal of Political Economy, Scottish Economic Society, vol. 35(2), pages 129-148, May.
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