Domestic and foreign acquisitions, plant survival and employment effects

Roger Bandick; Michael Koch

doi:10.1080/13504851.2022.2030033

Domestic and foreign acquisitions, plant survival and employment effects

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Department of Economics and Business Economics

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Abstract

We estimate causal treatment effects of domestic and foreign acquisitions on plant survival, employment (growth) and the skill composition within acquired plants. To do so, we look at takeovers of private firms in Danish manufacturing and service sectors during the period 2002–2015. We use plant-, firm-, and industry-level information to control for the non-random selection of the acquisition targets, differentiated for domestic and foreign acquirers, by combining a difference-in-differences approach with a propensity score weighting estimator. Our results reveal positive effects on plant survival, employment (growth) and the skill intensity for domestic targets, while foreign targets reduce their skill intensity following an acquisition.

Original language	English
Journal	Applied Economics Letters
Volume	30
Issue	7
Pages (from-to)	923-926
Number of pages	4
ISSN	1350-4851
DOIs	https://doi.org/10.1080/13504851.2022.2030033
Publication status	Published - 2023

Keywords

Acquisition
did matching estimator
employment growth
plant survival

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10.1080/13504851.2022.2030033Licence: CC BY-NC-ND

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AB - We estimate causal treatment effects of domestic and foreign acquisitions on plant survival, employment (growth) and the skill composition within acquired plants. To do so, we look at takeovers of private firms in Danish manufacturing and service sectors during the period 2002–2015. We use plant-, firm-, and industry-level information to control for the non-random selection of the acquisition targets, differentiated for domestic and foreign acquirers, by combining a difference-in-differences approach with a propensity score weighting estimator. Our results reveal positive effects on plant survival, employment (growth) and the skill intensity for domestic targets, while foreign targets reduce their skill intensity following an acquisition.

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Domestic and foreign acquisitions, plant survival and employment effects

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