Department of Economics
Graduate Institute Geneva
Maison de la Paix 619
1202 Genève, Switzerland
Institutional Affiliation: IHEID
Information about this author at RePEc
NBER Working Papers and Publications
|January 2018||Financial Constraints, Institutions, and Foreign Ownership|
with Ron Alquist, Nicolas Berman, Linda Tesar: w24241
This paper examines how external finance dependence, financial development, and institutions influence brownfield foreign direct investment (FDI). We develop a model of cross-border acquisitions in which the foreign acquirer's choice of ownership structure reflects a trade-off between easing target credit constraints and the costs of operating in an environment of low institutional quality. Using a dataset of cross-border acquisitions in emerging markets, we find evidence supporting the central predictions of the model that: (i) a foreign firm is more likely to fully acquire a target firm in sectors that are more reliant on external finance, or in countries with lower financial development/higher institutional quality; (ii) the level of foreign ownership in partially foreign-owned firms is...
Published: Ron Alquist & Nicolas Berman & Rahul Mukherjee & Linda L. Tesar, 2019. "Financial constraints, institutions, and foreign ownership," Journal of International Economics, . citation courtesy of
|February 2013||Fire-sale FDI or Business as Usual?|
with Ron Alquist, Linda Tesar: w18837
Using a new data set, we examine the characteristics and dynamics of cross-border mergers and acquisitions during emerging-market financial crises, that is, so-called "fire-sale FDI". Our findings shed fresh light on whether the transactions undertaken during crisis periods differ in fundamental ways from those undertaken during more tranquil periods. The increase in foreign acquisitions during crises is mainly driven by non-financial acquirers targeting firms in the same industry rather than foreign financial firms. This increase in acquisition activity in a given industry is unrelated to the industry's dependence on external finance. There is also no evidence of an increase in the size of stakes bought during crises. In terms of the effect of crises on emerging-market mergers and acquisi...
Published: Alquist, Ron & Mukherjee, Rahul & Tesar, Linda, 2016. "Fire-sale FDI or business as usual?," Journal of International Economics, Elsevier, vol. 98(C), pages 93-113. citation courtesy of