Publicação
Fire-sale FDI during the European financial crisis
| Resumo: | Using data on mergers and acquisitions in the period 1999-2018 for 27 Eurozone countries, I investigate the effects of the recent European financial crisis on the market for corporate assets. The Eurozone presents itself as an arena for testing the fire-sale FDI hypothesis of Krugman (2000). I test the two main implications of the hypothesis which are that the number of M&A deals should increase for the crisis-stricken countries during a crisis. Furthermore, that these deals should see lower prices compared to the rest of the Eurozone. The results indicate that the number of transactions involving the crisis countries do not increase during the crisis, which do not support the fire-sale FDI hypothesis. Moreover, the premiums paid for targets in the crisis countries are lower than the rest of the Eurozone, but this effect persists over the entire period and not only the crisis period. |
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| Autores principais: | Slettebakk, Sverre Olaf |
| Assunto: | Cross-border M&A Fire-sale FDI hypothesis Financial crises Foreign direct investment |
| Ano: | 2021 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | Using data on mergers and acquisitions in the period 1999-2018 for 27 Eurozone countries, I investigate the effects of the recent European financial crisis on the market for corporate assets. The Eurozone presents itself as an arena for testing the fire-sale FDI hypothesis of Krugman (2000). I test the two main implications of the hypothesis which are that the number of M&A deals should increase for the crisis-stricken countries during a crisis. Furthermore, that these deals should see lower prices compared to the rest of the Eurozone. The results indicate that the number of transactions involving the crisis countries do not increase during the crisis, which do not support the fire-sale FDI hypothesis. Moreover, the premiums paid for targets in the crisis countries are lower than the rest of the Eurozone, but this effect persists over the entire period and not only the crisis period. |
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