Mergers and Acquisitions in the Service Sector

Ilkka Ylhäinen and Mika Pajarinen

No 143, ETLA Reports from The Research Institute of the Finnish Economy

Abstract: Abstract We examined mergers and acquisitions in the service sector and the effects of the transition to foreign ownership. We analyzed firm-level data encompassing 1,243 service sector acquisitions that occurred from 2009–2018. The most foreign acquisitions occurred in the health and social services, business services, and trade; the largest shares were noted in health and social services, IT services, and communication. Larger firms with lower levels of cash flow and firms characterized by a growth-resource imbalance were most likely to be the targets of foreign acquisitions. After an acquisition, the target company’s equity ratio and profit before taxes decreased; however, effects on growth and employment remained limited.

Keywords: Mergers and acquisitions; Service sector; Foreign ownership; Foreign company (search for similar items in EconPapers)
JEL-codes: F23 F61 G34 L80 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2023-11-30
New Economics Papers: this item is included in nep-bec, nep-com and nep-sbm
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