Cherries for sale: The incidence and timing of cross-border M&A |
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Authors: | Bruce A Blonigen Lionel Fontagné Nicholas Sly Farid Toubal |
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Institution: | 1. Department of Economics, University of Oregon, Eugene, OR 97403-1285, United States;2. NBER, United States;3. Maison des Sciences Economiques, 106-112 Bd de l''Hôpital, 75647 Paris Cedex 13, France;4. CESifo, Germany;5. Ecole Normale Superieure de Cachan 61, avenue du Pr?sident Wilson, Bat Cournot, Office 503, 94235 Cachan Cedex, France |
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Abstract: | This paper develops a model of cross-border M&A activity that features firm-level productivity shocks and endogenous export activity. We show that foreign firms will be relatively more attracted to targets in the domestic country that had high productivity levels that induced them to invest in large export networks several years prior to acquisition, but subsequently experienced a negative productivity shock (i.e., cherries for sale). From the theory we derive a dynamic panel binary choice empirical model to predict cross-border M&A activity, and find strong evidence for our hypotheses connecting the evolution of firm-level productivity to the ultimate targets of cross-border acquisitions using French firm-level data. |
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Keywords: | Foreign direct investment Productivity Export networks |
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