M&As and Their Economic Effects on Target Companies

Abstract

This study examines mergers and acquisitions and their economic impact on companies. The study examined which companies in Finland become the targets of acquisitions, how the economic activities of the target companies develop after the change of ownership and whether there is a difference between domestic and foreign acquisitions in these respects. The study was conducted using firm-level data that included nearly 2,000 acquisitions, supplemented by a qualitative review of 19 research interviews. The results of the study show that companies’ innovation activities have a positive relation to the likelihood of being acquired, especially by foreign buyers. However, foreign acquisitions did not have a significant impact on the development of the value added, productivity, profitability or employment of target companies when compared with the control group.

Publication info

Results of research
Exit – foreign acquisitions and the future of innovative companies in Finland
Research group
Business renewal
Series
ETLA Raportit - Reports 125
Date
23.03.2022
Keywords
Mergers and acquisitions, M&A, Impact, Foreign ownership, Foreign company, Productivity
ISSN
2323-2447, 2323-2455 (Pdf)
JEL
D22, F23, G34, O30
Pages
48
Language
Finnish