Foreign acquisitions of Italian medium-sized companies from MNEs
Purpose of the paper: Italy is one of the most attractive European destinations for FDI inflows worldwide. It has witnessed a rapid increase in mergers and acquisitions, to the point of overcoming the EU 15 mean in the years 2008-2013 (with the exception of 2012) (UNCTAD, 2014). The question of whether governments should foster foreign take-overs is crucial, since the Italian economy has been traditionally founded on “national champions”.
The purpose of the paper is to present a broader research project that aims at investigating (at firms’ level) the performance differences of all the mid-sized foreign-controlled firms, compared with the non acquired firms in the manufacturing industry.
Methodology: the paper analyzes firms acquired in the period between 1999 and 2009 by using data from Mediobanca Research Department.
Findings: first results in terms of composition of the acquired mid-sized companies are shown.
Practical implications: the paper defines the different perspectives of analysis describing the managerial effects of foreign acquisitions on the acquired firms, the MNE acquirers, and the target country with respect to the industrial development, the employment and the supply chains of the territory.
Originality of the paper: the study uses Mediobanca Research Department database for the first time in order to investigate the topic of cross border acquisitions.
BALSVIK R., HALLER S.A. (2010), “Picking “Lemons” or Picking “Cherries”? Domestic and Foreign Acquisitions in Norwegian Manufacturing”, The Scandinavian Journal of Economics, vol. 112, n. 2, pp. 361-387.
BERTRAND O., ZITOUNA H. (2008), “Domestic versus Cross-border Acquisitions: Which Impact on the Target Firms’ Performance?”, Applied Economics, vol. 40, n. 17, pp. 2221-2238.
CAVES R.E. (1996), Multinational Enterprise and Economic Analysis, Cambridge university press, Cambridge.
CHARI A., CHEN W., DOMINGUEZ K.M.E. (2012), “Foreign Ownership and Firm Performance: Emerging Market Acquisitions in the United States”, IMF Economic Review, vol. 60, n. 1, pp. 1-42.
CHEN W. (2011), “The Effect of Investor Origin on Firm Performance: Domestic and Foreign Direct Investment in the United States”, Journal of International Economics, vol. 83, n. 2, pp. 219-228.
COLTORTI F., RESCINITI R., TUNISINI A., VARALDO R. (2013), Mid-sized Manufacturing Companies: The New Driver of Italian Competitiveness, Springer, Cham (ZG) Switzerland.
CONYON M.J., GIRMA S., THOMPSON S., WRIGHT P.W. (2002), “The Impact of Mergers and Acquisitions on Company Employment in the United Kingdom”, European Economic Review, vol. 46, n. 1, pp. 31-49.
DAMIJAN J.P., KONINGS J., POLANEC S. (2014), “Import Churning and Export Performance of Multi‐product Firms”, The World Economy, vol. 37, n. 11, pp. 1483-1506.
DEMIRBAG M., TATOGLU E., GLAISTER K.W. (2008), “Factors Affecting Perceptions of the Choice between Acquisition and Greenfield Entry: The Case of Western FDI in an Emerging Market”, Management International Review, vol. 48, n. 1, pp. 5-38.
DESYLLAS P., HUGHES A. (2008), “Sourcing Technological Knowledge through Corporate Acquisition: Evidence from an International Sample of High Technology Firms”, The Journal of High Technology Management Research, vol. 18, n. 2, pp. 157-172.
ENGELHARD J., NÄGELE J. (2003), “Organizational Learning in Subsidiaries of Multinational Companies in Russia”, Journal of World Business, vol. 38, n. 3, pp. 262-277.
GIRMA S., GÖRG H. (2007), “Evaluating the Foreign Ownership Wage Premium Using a Difference-in-Differences Matching Approach”, Journal of International Economics, vol. 72, n.1, pp. 97-112.
GUISO L., (2014), “Risk Aversion and Financial Crisis”, EIEF Working Papers Series 1412, Einaudi Institute for Economics and Finance (EIEF), revised Dec 2014.
HARZING A.W. (2002), “Acquisitions Versus Greenfield Investments: International Strategy and Management of Entry Modes”, Strategic Management Journal, vol. 23, n. 3, pp. 211-227.
HEYMAN F., SJÖHOLM F., TINGVALL P.G. (2007), “Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data”, Journal of International Economics, vol. 73, n. 2, pp. 355-376.
HOPKINS H.D. (2002), “Cross-border Mergers and Acquisitions: Global and Regional Perspectives”, International Mergers and Acquisitions: A reader, pp. 86-115.
LUO Y. (1999), “Entry and Cooperative Strategies in International Business Expansion”, Greenwood Publishing Group.
MATARAZZO M. (2012), Le strategie internazionali delle medie imprese. Modalità di entrata e nuovi mercati, Franco Angeli, Milano.
MCGUCKIN R.H., NGUYEN S.V. (2001), “The impact of ownership changes: A view from labor markets”, International Journal of Industrial Organization, vol. 1, n. 5, pp. 739-762.
PISCITELLO L., RABBIOSI L. (2005), “The Impact of Inward FDI on Local Companies’ Labour Productivity: Evidence from the Italian Case”, International Journal of the Economics of Business, vol. 12, n. 1, pp. 35-51.
UNCTAD (2000), World Investment Report 2000, New York, United Nations.
UNCTAD (2014), World Investment Report 2014, New York and Geneva, United Nations.
WECHE GELÜBCKE J.P. (2013), “The Performance Of Foreign Affiliates in German Manufacturing: Evidence from a New Database”, Review of World Economics, vol. 149, n. 1, pp. 151-182.