The effects of cross-border MAs on the acquirers' domestic performance: Firm-level evidence

Abstract

This paper provides empirical evidence on the effects of cross-border mergersacquisitions (MAs) on the acquiring firms' domestic performance in the U.K.France. We build a new firm-level data set that combines a global MA database with balance sheet data for the years 2000 to 2007. Combining matching techniques with a difference-in-differences estimatorwe find that cross-border MAs boost on average acquirers' domestic salesinvestment,they are not accompanied by a downsizing of the domestic labour force in either country. Furthercross-border MAs in knowledge-intensive industries lead to improvements in domestic productivity. Our results display some heterogeneity across industriestypes of acquisitionssuggesting a connection between the motives for international MAstheir resulting effects. © Canadian Economics Association.