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The entry mode choice of EU leading companies (1987-1997)

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Abstract

The aim of the paper is to provide empirical evidence on the relationship between industrial structure and M&A process. We focus on the determining factors fostering a firm to choose controlling acquisitions or non-controlling ones. We use the Acquisitions and Divestments Database (ADD), a data-base collecting equity operations made by top-90 EU leaders in the period 1987-1997. A logit analysis shows some variables that increase the probability that the firm’s entry mode choice is a non-controlling-acquisition: firm’s size, firm’s diversification strategy, industry concentration, oligopolistic competition. On the contrary, the R&D differentiated industries and the role of the stock exchange market enforce the probability that the firm’s entry mode is a controlling acquisition.

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  • Giampaolo Vitali, 1999. "The entry mode choice of EU leading companies (1987-1997)," CERIS Working Paper 199910, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    • Handle: RePEc:csc:cerisp:199910
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    More about this item

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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