Foreign and Domestic Takeovers in Germany: First Comparative Evidence on the Post-acquisition Target Performance using new Data

John P. Weche

No 249, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: This study provides the first comparative evidence of foreign and domestic acquisitions in Germany. A propensity score matching approach combined with a difference-in-difference estimator were performed separately for foreign and domestic acquisitions to account for a general takeover effect. The study is based on new high-quality panel data for manufacturing enterprises, provided by German offcial statistics. The results indicate a negative impact of foreign takeovers on employment and no productivity improvements for the period 2007 to 2009. This evidence contradicts existing empirical studies for Germany which find significant productivity improvements and no changes in terms of employment. These fndings are of particular interest to Germany as one of the most important FDI in ow 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.

Keywords: post-acquisition performance; foreign takeover; manufacturing; treatment analysis; Germany (search for similar items in EconPapers)
JEL-codes: F21 F23 G34 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2012-09
New Economics Papers: this item is included in nep-eff
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