Analysing the employment effects of mergers and acquisitions

This paper examines the employment effects of mergers and acquisitions (M&As) by using matched establishment-level data from Finland. Our data register practically almost all M&As in all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results show that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in non-manufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but they exhibit an interesting sectoral variation.     

Pre-empting technology competition through firm acquisitions

This paper shows that firms engage in horizontal mergers and acquisitions to pre-empt competition in technology markets. Making use of the patent application procedure at the European Patent Office we introduce a measure for potential entry barriers in technology markets.     

Globalization and profitability of cross-border mergers and acquisitions

This paper studies how the surplus generated by the globalization process is divided between MNEs and owners of domestic assets. We construct an oligopoly model where the equilibrium acquisition pattern, the acquisition price and firms’ greenfield investments are endogenously determined. Acquisition entry is shown to be more likely when the complementarity between domestic and foreign assets is high. However, we show that such acquisitions might have a low profitability, since the bidding competition over the domestic assets is then so fierce that the firms involved would be better off not starting a bidding war. Risks associated with different entry modes are also examined.     

The industry life-cycle of the size distribution of firms

This paper analyzes the evolution of the distributions of output and employment across firms in U.S. manufacturing industries from 1963 until 1997. The firm size distribution changes significantly as an industry goes through stages of its life-cycle. The evolutions of the employment and output distributions also differ significantly, but display strong inter-industry regularities, including that the nature of the evolution depends on whether the industry is experiencing growth, shakeout, maturity, or decline. The observed patterns have implications for theories of industry dynamics and evolution.     

The effect of heterogeneous beliefs on mergers and acquisitions

This article investigates the effect of heterogeneous beliefs on firms’ mergers and acquisitions (M&A) decisions. Using data of China’s financial market, which is featured with great heterogeneity of belief, we find that heterogeneous beliefs are positively associated with the occurrence of M&A transactions, and firms with greater heterogeneous beliefs are more likely to pay the transactions with stock. Moreover, we show that government intervention, measured by state ownership, weakens the effect of heterogeneous beliefs on firms’ M&A decisions.     

Entry,growth, and survival: The new learning on firm selection and industry evolution

This paper tries to shed some light on the seeming paradox posed by the findings in the industrial organization literature that (1) the bulk of firms in an industry are not only very small, but also sufficiently small so that they are operating at a sub-optimal scale of output, and (2) entrepreneurs are apparently not deterred from starting new firms even in industries where scale economies play an important role. A dynamic view of the process of firm selection and industry evolution is that new firms typically start at a very smal scale of output. Because this level of output may be sub-optimal, the firm must grow in order to survive. The empirical evidence supports such a dynamic view of the evolutionary nature of industries. Viewed through a dynamic lens, the often-observed asymmetric size distribution of firms becomes more understandable. The persistence of an asymmetric firm-size distribution skewed towards small enterprises presumably reflects a continuing process of entry into industries and not necessarily the survival of such small and suboptimal enterprises over a long period of time.     

Cournot competition and endogenous firm size

The paper studies the dynamics of firm size in a repeated Cournot game with unknown demand function. We model the firm as a type of artificial neural network. Each period it must learn to map environmental signals to both a demand parameter and its rival’s output choice. However, this learning game is in the background, as we focus on the endogenous adjustment of network size. We investigate the long-run evolution of firm/network size as a function of profits, rival’s size, and the type of adjustment rules used.

我国大型企业海外并购的困境和出路探索

随着我国综合国力的增强,大型企业逐步走出国门实施海外并购。但由于多种原因,我国不少大型企业海外并购陷入困境并屡屡遭受重大损失。深入剖析我国大型企业海外并购陷入困境或遭受重大损失的原因,探索并尽快找到行之有效的解决办法,提高海外并购的绩效和成功率,尽快摆脱困境并走上健康发展轨道,已刻不容缓。     

The impact of mergers on acquiring firm shareholder wealth: The 1905–1930 experience

From the standpoint of investors successful acquisitions increase profitability and stock Contemporary studies find acquiring firm shareholders earning small gains before and large losses after consolidation. Using modern financial market procedures, we examine a portfolio of 191 acquiring firms from 1905 to 1930 to determine the impact on firm owners of early industrial acquisitions in the United States and the effect of institutional changes on takeover gains. Acquisitions from 1905 to 1930 raised shareholder wealth by more than 3 percent, an increase exceeding gains from more recent mergers. Stock price continued to rise after completion for acquisitions before World War I, but fell dramatically for acquisitions during the oligopoly merger wave of the late 1920s.We would like to thank Patrick Byrne and Tara Nussman for help in collecting the financial data, Ralph Nelson for permitting us to use his and Carl Eis's worksheets on merger activity from 1905 to 1930, and George Bittlingmayer, Malcolm Burns, David Gulley, Stephen Grubaugh, Lori Leeth, John Matsusaka, Dennis Mueller, Rexford Santerre, Scott Sumner, Tugrul Temel, and Nikhil Varaiya for their helpful comments.     

The distributional effects of selection and capital accumulation on firm productivity under imperfect capital markets

In this evolutionary model, random shocks create differences in the rate of return on capital, while individual saving and investment behavior can reduce these differences over time. Firms with either low total factor productivity (TFP) or a low average return on capital are selected for exit, and new firms enter to take their place. As would be expected, a higher turnover rate improves TFP and reduces its variation. While we show that a higher turnover rate would result in a more positively skewed TFP distribution if exit selection is based directly upon TFP, we find that when we select firms for exit based on their average product of capital, the marginal impact of a higher turnover rate is to more negatively skew the TFP distribution. Overall, our simulations highlight the importance of considering the role selection may play in shaping the distribution of productivity when econometricians seek estimates of firm inefficiency.

Patents, firm size and financial constraints: an empirical analysis for a panel of Italian manufacturing firms

The paper empirically investigates the issue of financial constraintsto investment, focusing on its relationship with innovationactivities. The study is based on the analysis of a cross-industriespanel of 804 Italian companies, observed through the years 1995–2000.The main objective of the study is to highlight whether thereare financial determinants underlying the strong bias of patentingactivity towards larger companies in the Italian economy. Byapplying a dynamic panel analysis, we found that only the firmsshowing lower financial constraints are able to keep a sustainedpatenting profile through time. Our evidence suggests the existenceof an imperfect capital market in the Italian economy, particularlyin the case of medium-sized companies, which tend to delay inefficientlythe start of in-house R&D activities.     

企业并购定价诸方法之选择研究

并购作为企业规模扩张的一种效率较高的形式，被越来越多的企业所采用。而被并购企业价值的确定，即并购定价的准确与否直接决定着并购交易的成功或失败，以及并购后企业绩效的优劣。企业并购的定价方法有多种，备具特色，定价时应当视具体情况选取最为适合的定价方法以适应并购决策的需要。     

高新技术企业并购研究——基于战略目标

目前全球已进入一个新的技术竞争时代,全球技术资源状态与研发体系以及技术变更速度的加快已经改变了原来的产业竞争方式,以速度为支撑的技术竞争已经成为主流,通过并购获得技术优势成为新的选择。高新技术企业凭借其高成长性和未来预期的高收益性目前已成为全球并购市场的焦点。企业基于战略来选择并购目标可以从根本上保证目标企业与自己的战略匹配。文章对高新技术行业发展的特点与规律进行研究,发现高新技术企业广泛大量并购技术型小企业是由高新技术行业的发展规律决定的,高新技术企业收购的实质是收购人才,在不同发展阶段其并购的动因与目标也不同。通过对思科的并购战略及并购目标选择规律进行研究,以期为我国高新技术企业并购目标选择提供借鉴与启示。     

The effect of firm size and firm activities on CSR practices of selected Chinese-Filipino-owned MSMEs in Metro Manila

Socially-responsible business and ethical behavior of companies have been of interest to academia and practice for decades, but the focus has almost exclusively been on large corporations, while small and medium-sized enterprises （SMEs） have not received as much attention （Hammann, et al., 2009）. Worthington, et al （2006） recognized the need to encourage socially-responsible business practices among the 90 per cent or more of the world＇s businesses that are classified as SMEs. Perrini, et al （2007） found that size explains the differences in firms＇ willingness to define and implement such specific corporate social responsibility （CSR） strategies, while Murillo and Lozano （2006） concluded that it still remains to be explored whether manufacturing companies tend to apply CSR more extensively, or whether businesses oriented to other business have a tendency to incorporate CSR into their management patterns to a higher degree. Moreover, President Gloria Macapagal-Arroyo, in her 7 June, 2002 speech, recognized the importance of Chinese-Filipinos in helping improve the Philippine economy, and yet, not much research had been done on this sub-sector. Thus, this paper focuses on the effect of finn size and finn activities on the social responsibility practices of selected 30 micro, small and medium-sized enterprises （MSMEs） in Metro Manila which are owned by Chinese-Filipinos. Survey questionnaires and interview were used for gathering data, while a correlations test was used to analyze the data and to conclude whether finn size and finn activities have an effect on the sampled companies＇ CSR practices.     

Determinants of firm survival: a duration analysis using the generalized gamma distribution

We use parametric duration analysis to study the survival of Austrian firms. We find that hazard rates in both manufacturing and services initially increase, reach a peak after the first year of operation and then decrease with age. The maximum hazard rate is higher in services. We also find differences in hazard rates among different types of manufacturing industries distinguished by the nature of their sunk costs, their reliance on human resources and inputs from external services. Finally, we find that larger initial size and higher market growth, and at the same time lower net entry and declining market concentration prolong the life of an entrant.

Understanding the size and profitability of firms: The role of a biological factor

In a large sample of entrepreneurs, 2D:4D (second-to-fourth digit) ratio and managerial performance are studied. Entrepreneurs with lower ratio manage larger firms, manage larger firms when acquire control and experience faster average growth. Firms run by high prenatal testosterone entrepreneurs have lower profitability as measured by return on assets and return on sales. Prenatal testosterone is correlated with elicited measures of entrepreneurial skills, like work effort and optimism and the latter are correlated with firm size. This evidence suggests entrepreneurial ability has a biological component and is consistent with models of the size distribution of firms based on entrepreneurial ability.     

Employment growth and innovation at the firm level

We analyze the influence of innovation on growth rates of employment in 859 Dutch manufacturing firms over the period 1983–1988. Whereas the (growth of the) R&D intensity of firms has a slightly negative impact on employment, we find that firms with a high share of product-related R&D (as a proxi of R&D related to industrial activities in an early stage of the life cycle) experienced an above average growth of employment. The same holds for firms which directed their R&D towards information technology. Smaller firms have, ceteris paribus, substantially higher growth rates of employment than their larger counterparts. Against our expectations, R&D cooperation has no significant impact on employment growth. The same holds for activities in the fields of biotechnology and new materials.     

OWNERSHIP STRUCTURE AND FIRM EXIT ROUTES

ABSTRACT

Our study presents empirical evidence about the role of ownership structure for firm exit probability by explicitly differentiating between distinct exit routes (bankruptcy and forced liquidation, voluntary liquidation, mergers and acquisitions – M&A, and removal from the court register). Based on the population of Slovenian firms in the 2006–2012 period and using multinomial probit, our findings support the predictions of agency theory. Ownership concentration, share of the largest owner, and the difference in shares between two largest owners all decrease the likelihood of exit for all studied exit routes but M&A. The magnitude of their impact is largest for exits, in which owners play a decisive role, i.e. voluntary liquidation and removal. The link between the number of primary owners and exit likelihood is U-shaped with the lowest exit probability for firms with around two owners.     

多参与人条件下并购中博弈决策机制研究

传统并购决策考虑的是决策者如何在并购的可行方案中选出最优或次优策略,很少涉及到当对手策略变化时所选的策略是否最优。并购决策是多人相关决策,需要在多个利益相关者相互影响的环境中研究并购策略的合理性。需要考虑主并企业内部股东和管理层,主并企业与政府、竞争对手和目标企业多个利益相关者之间的相互影响。由于股东和经营管理者利益的不同,股东须通过设计适当的激励和约束机制,使经营管理者个人利益与股东利益协调统一。企业并购决策是竞争对手参与并购可能性以及目标企业对主并企业、竞争对手参与并购信念的依存函数。政府是否批准并购项目与项目的前景属性相关。目标企业的所有制形式对并购有重要影响,目标企业是国有企业,管理层和员工的利益不可忽视,对于非国有企业,主要考虑的是预期收益。     

The interaction of firing costs and firm training

By allowing firms to invest in their workers’ human capital, this paper extends the traditional analysis of firing costs with respect to two points, both of them positive in terms of welfare. On the one hand, firing restrictions reduce turnover, thereby enhancing incentives to provide training. On the other hand, training gives firms the opportunity to lower the costs of firing restrictions since well-trained workers are less likely to be fired. In this way the negative effects of firing costs on firm profitability and workers’ job-finding rates are reduced.