M&As, investment and financing constraints
Joel Stiebale () and
No 257, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
We use a panel data set of European firms to analyse the effects of domestic and international M&As on target firms' investment, growth and financial constraints. Combining propensity score matching with a difference-in-differences estimator, our results indicate that upon acquisition, target firms obtain better access to external finance, are characterized by higher levels of tangible and intangible assets, and display lower dependence of investments and cash savings to the availability of internal funds. We also provide evidence that these effects are concentrated among acquisitions during the 2007-2009 financial crisis, relatively small target firms, and domestic rather than foreign acquisitions.
Keywords: Mergers and Acquisitions; Financial Constraints; Investment; Firm Growth; Financial Crisis; Foreign Ownership (search for similar items in EconPapers)
JEL-codes: F61 F23 G01 G34 L25 D22 D24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-eur, nep-int and nep-sbm
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Working Paper: M&As, Investment and Financing Constraints (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:257
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