Performance of domestic and cross-border acquisitions: Empirical evidence from Russian acquirers

Bertrand, Olivier, and Betschinger, Marie-Ann-Performance of domestic and cross-border acquisitions: Empirical evidence from Russian acquirers This paper investigates the long-term impact of domestic and international acquisitions, initiated by Russian firms, on their operating performance. In general, acquisitions can be associated with synergy gains, internalization advantages, and higher market power. Acquisitions, however, may also give rise to agency problems as well as new integration and organizational costs, leading to an ambiguous overall impact on the performance of acquirers. Based on a sample of more than 600 acquirers we show that both domestic and international acquisitions tend to reduce the performance of acquirers compared to non-acquiring firms. Examining how different deal, firm and industry level characteristics moderate the value destroying effects of acquisitions, our results suggest that Russian acquirers suffer from the inability to leverage value due to low M&A experience and capability, especially when making international acquisitions. Journal of Comparative Economics 40 (3) (2012) 413-437. SKEMA Business School, Rue Dostoievski, BP 085, 06902 Sophia Antipolis Cedex, France; Graduate School of Management, St. Petersburg University, Russia; Higher School of Economics, Pokrovski Bulvar, 11, 109028 Moscow, Russia. (C) 2011 Association for Comparative Economic Studies Published by Elsevier Inc. All rights reserved.