The Eff ects of Cross-border M&As on the Acquirers’ Domestic Performance – Firm-level Evidence

Abstract

This paper provides empirical evidence on the eff ects of cross-border M&As on investing fi rms’ domestic performance in the U.K. and France. We build a new fi rm-level dataset that combines a global M&A database with balance sheet data for the years 2000–2007. Combining matching techniques with a diff erence-in-diff erences estimator, we fi nd that cross-border deals boost on average domestic employment, sales, and investment, and they are not accompanied by a downsizing of the domestic labor force in neither of both countries. Further, acquisitions in knowledge-intensive industries lead to improvements in domestic productivity. Our results display some heterogeneity across industries and types of acquisitions, suggesting a connection between the motives for international acquisitions and their resulting effects.Multinational fi rms; cross-border M&A; productivity; employment growth; investment