GEP 13/08: Foreign Acquisitions and Firm-Level Financial Risk

Summary

This paper examines the impact of acquisitions on firm-level financial risk in Italy and Spain. It shows that foreign acquisition leads to a significant reduction in financial risk.

Abstract

This paper examines the impact of foreign and domestic acquisitions on firm-level financial risk in Italy and Spain over the period 2002-2010. Our results indicate that foreign acquisition leads to a significant and steady reduction in financial risk. In contrast, the domestic acquisition effects are smaller and statistically less robust.

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Authors

Georgios Efthyvoulou and Liza Jabbour

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