The impact of foreign takeovers: comparative evidence from foreign and domestic acquisitions in Germany

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Authors

This study provides the first evidence of foreign takeover effects on the performance of acquired firms in Germany that considers a general takeover effect through the comparison with domestic takeovers. A propensity score matching approach combined with a difference-in-differences (DiD) estimator were performed with new high-quality panel data for manufacturing enterprises, provided by German official statistics. The results indicate a negative impact of foreign takeovers on employment and no productivity improvements for the period 2007–2009. This evidence contradicts existing empirical evidence for Germany which suggests significant productivity improvements and no changes in terms of employment. These findings are of particular interest to Germany as one of the most important FDI inflow destinations worldwide. They contribute to the foreign ownership performance premium literature as well as improving the understanding of foreign acquisition consequences, a subject of utmost topicality.
Original languageEnglish
JournalApplied Economics
Volume47
Issue number8
Pages (from-to)739-755
Number of pages17
ISSN0003-6846
DOIs
Publication statusPublished - 13.02.2015

    Research areas

  • Economics - foreign takeover, manufacturing, post-acquisition performance, treatment analysis

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