@article{Fire-Sale:1642,
      recid = {1642},
      author = {Alquist, Ron and Mukherjee, Rahul and Tesar, Linda},
      title = {Fire-Sale FDI or Business as Usual?},
      address = {2013},
      pages = {1 online resource (iv, 39 pages)},
      abstract = {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 acquisitions, we  find little evidence that foreign acquisitions are resold,  or “flipped,” more frequently than domestic acquisitions.  Moreover, flipping rates are uncorrelated with the  industry’s dependence on external finance. Finally, the  probability of being flipped to a domestic buyer does not  differ across crisis and non-crisis periods. All of these  results are robust to alternative empirical specifications,  different definitions of crises, and the inclusion of  macroeconomic controls. Contrary to conventional wisdom,  fire-sale FDI and asset flipping by foreign firms appear to  have been “business as usual.”},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1642},
      doi = {https://doi.org/10.34989/swp-2013-17},
}