Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany

Research output: Working paperWorking papers

Standard

Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany. / Wagner, Joachim; Weche Gelübcke, John Philipp.
Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg, 2013. (Working Paper Series in Economics; No. 283).

Research output: Working paperWorking papers

Harvard

Wagner, J & Weche Gelübcke, JP 2013 'Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany' Working Paper Series in Economics, no. 283, Institut für Volkswirtschaftslehre der Universität Lüneburg, Lüneburg.

APA

Wagner, J., & Weche Gelübcke, J. P. (2013). Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany. (Working Paper Series in Economics; No. 283). Institut für Volkswirtschaftslehre der Universität Lüneburg.

Vancouver

Wagner J, Weche Gelübcke JP. Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany. Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg. 2013 Sept. (Working Paper Series in Economics; 283).

Bibtex

@techreport{104f2e0598dd416abfd193a21e7ee9ee,
title = "Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany",
abstract = "In this paper we present the first evidence for a link between foreign ownership and credit constraints for Germany, one of the world's leading target countries for foreign direct investment. Furthermore, we contribute to the literature by investigating the impact of a foreign acquisition on the target firms' credit constraints for the first time. We use newly available comprehensive panel data that we constructed from information collected by the German statistical offices and from credit rating scores supplied by the leading German credit rating agency. We ind foreign owned firms in German manufacturing on average to show slightly more financing restrictions than domestically owned enterprises, but this very small difference diminishes once unobserved heterogeneity is taken into account. We further demonstrate that one reason for this finding is the preference of foreign investors for targets with relatively low credit-worthiness. Although the likelihood of a foreign acquisition appears to be correlated with credit constraints, there is no impact of foreign takeovers on the credit constraints of the target firms ex post and therefore no support for the hypothesis that foreign takeovers ease financial frictions.",
keywords = "Economics, credit constraints, foreign ownership, acquisitions, Germany",
author = "Joachim Wagner and {Weche Gel{\"u}bcke}, {John Philipp}",
year = "2013",
month = sep,
language = "English",
series = "Working Paper Series in Economics",
publisher = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",
number = "283",
type = "WorkingPaper",
institution = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",

}

RIS

TY - UNPB

T1 - Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany

AU - Wagner, Joachim

AU - Weche Gelübcke, John Philipp

PY - 2013/9

Y1 - 2013/9

N2 - In this paper we present the first evidence for a link between foreign ownership and credit constraints for Germany, one of the world's leading target countries for foreign direct investment. Furthermore, we contribute to the literature by investigating the impact of a foreign acquisition on the target firms' credit constraints for the first time. We use newly available comprehensive panel data that we constructed from information collected by the German statistical offices and from credit rating scores supplied by the leading German credit rating agency. We ind foreign owned firms in German manufacturing on average to show slightly more financing restrictions than domestically owned enterprises, but this very small difference diminishes once unobserved heterogeneity is taken into account. We further demonstrate that one reason for this finding is the preference of foreign investors for targets with relatively low credit-worthiness. Although the likelihood of a foreign acquisition appears to be correlated with credit constraints, there is no impact of foreign takeovers on the credit constraints of the target firms ex post and therefore no support for the hypothesis that foreign takeovers ease financial frictions.

AB - In this paper we present the first evidence for a link between foreign ownership and credit constraints for Germany, one of the world's leading target countries for foreign direct investment. Furthermore, we contribute to the literature by investigating the impact of a foreign acquisition on the target firms' credit constraints for the first time. We use newly available comprehensive panel data that we constructed from information collected by the German statistical offices and from credit rating scores supplied by the leading German credit rating agency. We ind foreign owned firms in German manufacturing on average to show slightly more financing restrictions than domestically owned enterprises, but this very small difference diminishes once unobserved heterogeneity is taken into account. We further demonstrate that one reason for this finding is the preference of foreign investors for targets with relatively low credit-worthiness. Although the likelihood of a foreign acquisition appears to be correlated with credit constraints, there is no impact of foreign takeovers on the credit constraints of the target firms ex post and therefore no support for the hypothesis that foreign takeovers ease financial frictions.

KW - Economics

KW - credit constraints

KW - foreign ownership

KW - acquisitions

KW - Germany

M3 - Working papers

T3 - Working Paper Series in Economics

BT - Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany

PB - Institut für Volkswirtschaftslehre der Universität Lüneburg

CY - Lüneburg

ER -

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