 Growing lemons and cherries? Pre- and post-acquisition performance of foreign-acquired firms in new EU member statesJoze Damijan, Crt Kostevc and Matija Rojec LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven Abstract: Foreign acquisitions are an increasingly important mode of FDI in the new EU member states (NMS). Using ?rm-level data and a common estimation framework for seven NMS we study pre-and post-acquisition performance of acquired ?rms. We ?nd that selection criteria of target ?rms di¤er signi?cantly across countries. In some countries the evidence supports the idea of ?cherry picking? with better ?rms being chosen as targets for acquisition, while in the others ?lemons?with growth potential tend to get selected. Regardless of whether ?cherries?or ?lemons?are targeted, performance of acquired ?rms improved after the acquisition, whereby the boost in productivity has not been achieved by a reduction in employment, as it even increased, but rather by increased e¢ ciency in the use of labor and especially capital. Additionaly, foreign ownership is found to yield biggest rewards to small less productive ?rms. Keywords: cross-border mergers and acquisitions; ?rm productivity; picking lemons (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:lic:licosd:31812 Access Statistics for this paper More papers in LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.