Motives to Restructure Industries – Finnish Evidence of Cross-Border and Domestic Mergers and Acquisitions

Eero Lehto

No 195, Working Papers from Työn ja talouden tutkimus LABORE, Labour Institute for Economic Research LABORE

Abstract: We have estimated a multilogit model for the probabilities that a firm will acquire or become a target in different M&A categories, which are defined according to the location of an acquiring firm with respect to a target. We discovered that such firm characteristics of an acquiring firm that can be regarded as an indication of a good capacity to monitor a target or to internalise the potential synergies of M&A increase the probability of distant M&As at the expense of close M&As. Respectively, such factors that ease the monitoring of the target firm’s value increase the probability that such a firm becomes a target which is located far from an acquiring firm.

Keywords: mergers and acquisitions; home bias; monitoring (search for similar items in EconPapers)
JEL-codes: D8 G34 R30 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2004-05-04
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