Evidence of Fire-Sale M&A in European Transition Countries

Josipa Visic
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Josipa Visic: University of Split, Croatia

Managing Global Transitions, 2012, vol. 10, issue 4 (Winter), 325-340

Abstract: The aim of this paper is to determine differences in variables that create investment climate and therefore affect the values of incoming crossborder M&A in selected European transition countries. Cluster analysis for 1999 and 2007 shows that countries with unfavourable investment climate received high levels of incoming cross-border M&A. Sole country in the cluster characterised by healthy investment area (Slovenia) had the highest GDP per capita accompanied with the lowest values of incoming cross-border M&A relative to its GDP. These results could be interpreted as an evidence of fire-sale M&A in most European transition countries. In 2010, situation changed and although recession left trace, data on cross-border M&A indicate that foreign investors focused more on companies which operated in countries with healthier economy. These results indicate that a healthy investment climate is necessary to provide a sustainable economic development of a country.

Keywords: cross-border M&A; fire-sale M&A; sustainable economic development; investment climate (search for similar items in EconPapers)
JEL-codes: F21 G34 (search for similar items in EconPapers)
Date: 2012
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