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Mergers and Acquisitions in the Service Sector

Author

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  • Ylhäinen, Ilkka
  • Pajarinen, Mika

Abstract

We examined mergers and acquisitions in the service sector and the effects of the transition to foreign ownership. We analyzed firm-level data encompassing 1,243 service sector acquisitions that occurred from 2009–2018. The most foreign acquisitions occurred in the health and social services, business services, and trade; the largest shares were noted in health and social services, IT services, and communication. Larger firms with lower levels of cash flow and firms characterized by a growth-resource imbalance were most likely to be the targets of foreign acquisitions. After an acquisition, the target company’s equity ratio and profit before taxes decreased; however, effects on growth and employment remained limited.

Suggested Citation

  • Ylhäinen, Ilkka & Pajarinen, Mika, 2023. "Mergers and Acquisitions in the Service Sector," ETLA Reports 143, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:report:143
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    More about this item

    Keywords

    Mergers and acquisitions; Service sector; Foreign ownership; Foreign company;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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