Bamiatzi, V., Efthyvoulou, G. orcid.org/0000-0002-4473-0350 and Jabbour, L. (2017) Foreign vs domestic ownership on debt reduction: An investigation of acquisition targets in Italy and Spain. International Business Review, 26 (5). pp. 801-815. ISSN 0969-5931
Abstract
This paper examines the role of foreign versus domestic ownership in reducing the debt levels of acquired firms in Italy and Spain over the period 2002–2010. Acknowledging that lower debt levels can mitigate the risk of failure and thus enhance the chances for a positive post-acquisition performance and survival, we particularly examine the causal effect of foreign and domestic acquisitions on two firm-level debt measures: gearing and short-term leverage. To estimate causal relationships, we control for selection bias by applying propensity score matching techniques. Our results indicate that foreign acquisition leads to a significant and steady reduction in the debt ratios of the target companies. In contrast, the relationship between domestic acquisition and debt reduction appears to be smaller and statistically less robust.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2017 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/). |
Keywords: | debt ratios; capital structure; acquisitions; foreign investment |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 01 Feb 2017 14:07 |
Last Modified: | 07 Nov 2018 10:02 |
Published Version: | https://doi.org/10.1016/j.ibusrev.2017.01.008 |
Status: | Published |
Publisher: | Elsevier |
Refereed: | Yes |
Identification Number: | 10.1016/j.ibusrev.2017.01.008 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:111302 |