 Does cross-border M&A improve merging firms’ domestic performances?Sung Hyun Son and Young-Han Kim Journal of Asian Economics, 2024, vol. 90, issue C Abstract: Facing the concerns that outward foreign direct investments might hollow out domestic corporate activities, we examine whether cross-border acquisitions by emerging market enterprises (EMEs) improve or damage domestic corporate performances based on the data of 348 Indian firms’ cross-border M&A experiences from 1995 to 2017. We investigate acquirers’ post-M&A performances by nonparametric flexible conditional difference-in-difference (DID) analysis which considers different treatment timing and periods. We find that cross-border acquisitions increase acquiring firms’ domestic sales, total labor costs, and total factor productivity (TFP). In addition, we demonstrate that Indian firms’ cross-border M&As in technology-intensive sectors with merged firms located in OECD countries taking the form of horizontal M&As show better domestic performances. The results implicate that well-tuned outward FDIs via cross-border M&As of emerging economies do not hollow out but complement domestic corporate activities. Keywords: Cross-border M&A; Indian firms’ Domestic Performance; Productivity spillover effects; Cross-border M&As’ impacts on domestic performances (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:90:y:2024:i:c:s1049007823001161 DOI: 10.1016/j.asieco.2023.101696 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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