Which Firms Do Foreigners Buy? Evidence from the Republic of Korea

Using data on mergers and acquisitions involving Korean firms, the authors identify which sectors and firms attracted foreign investment after the liberalization of investment of activity at the end of 1997. They find that domestic acquisitions are similar to foreign acquisitions by sector (of both the target and the acquiring firm), but that international transactions are larger than Korean transactions. This suggests that consolidation is a two-stage process: Firms consolidate first domestically, then internationally. The authors also find that foreign investment is focused on high-value-added sectors, on larger and more profitable firms, on firms with low debt, and on firms that export a large share of output. Their results suggest that growth induces foreign investment.

Bibliographic Details

Main Authors:	Freund, Caroline, Djankov, Simeon
Language:	en_US
Published:	World Bank, Washington, DC 2000-09
Subjects:	access to capital, assets, Banking Systems, bankruptcy, bidders, book value, Collective Action, comparative advantage, Currency Crises, debt, Development Economics, domestic firms, domestic investment, domestic investors, Economic Growth, Economic Policy, economies of scale, emerging markets, export share, Fair Trade, FDI, financial crisis, financial data, financial information, Financial Sector, Financial Structure, firm size, foreign capital, foreign direct investment, foreign firm, foreign firms, foreign investment, foreign investor, foreign investors, Foreign ownership, Global Economy, global markets, growth potential, Growth Rate, Growth Theory, host country, host-country, human capital, industrial distribution, Industrial Economics, International Economics, international investors, international markets, International Trade, investment activity, labor productivity, local firms, local market, Medicine, mergers, multinational companies, Multinational Enterprises, national economies, portfolio, portfolio investment, production function, productivity, productivity growth, profitability, Programs, Safety Nets, Standard errors, statements, Takeover, tax incentives, technology diffusion, technology transfer, Telecommunications, Trade Effects, transaction value, transport costs, Transport Equipment, Value Added, world industry, World Investment Mergers, Foreign investment, Value added, Foreign direct investments, Location factors, Transport costs, Technological capacity, Brand name, Marketing, Access to capital markets, Corporate debt, Export capacity, Corporate profits,
Online Access:	http://hdl.handle.net/10986/21334
Tags:	Add Tag No Tags, Be the first to tag this record!