Distressed Acquisitions: Evidence from European Emerging Markets

53 Pages Posted: 23 Apr 2021

See all articles by Ichiro Iwasaki

Ichiro Iwasaki

Hitotsubashi University - Institute of Economic Research

Evžen Kočenda

Charles University in Prague - Institute of Economic Studies; Institute of Information Theory and Automation (Czech Academy of Sciences) - Department of Econometrics; CESifo; University of Regensburg - Institute for East and Southeast European Studies; University of Michigan at Ann Arbor - The William Davidson Institute

Yoshisada Shida

Economic Research Institute for Northeast Asia (ERINA)

Date Written: 2021

Abstract

We analyze factors behind 23,213 distressed acquisitions in European emerging markets from 2007–2019. Besides the impact of financial ratios, legal form, ownership structure, firm size, and age, we emphasize the role of institutions and channels of their propagation. We show that the quality and enforcement of insolvency laws are linked with the lower probability of distressed acquisitions, followed by corruption control and progress in banking reforms. The impact of institutions is larger in less-advanced countries as compared to economically stronger ones. The effect of institutions increased after the financial crisis but declined as the economic situation improved.

JEL Classification: C350, D020, D220, E020, G340, K200, L220

Suggested Citation

Iwasaki, Ichiro and Kocenda, Evzen and Shida, Yoshisada, Distressed Acquisitions: Evidence from European Emerging Markets (2021). Available at SSRN: https://ssrn.com/abstract=3832481 or http://dx.doi.org/10.2139/ssrn.3832481

Ichiro Iwasaki (Contact Author)

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan

Evzen Kocenda

Charles University in Prague - Institute of Economic Studies ( email )

Opletalova St. 26
Prague, 11000
Czech Republic

HOME PAGE: http://kocenda.fsv.cuni.cz

Institute of Information Theory and Automation (Czech Academy of Sciences) - Department of Econometrics ( email )

Pod vodarenskou vezi 4
CZ-18208 Praha 8
Czech Republic

CESifo

Poschinger Str. 5
Munich, DE-81679
Germany

University of Regensburg - Institute for East and Southeast European Studies

Landshuterstr. 4
Regensburg, 93047
Germany

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Yoshisada Shida

Economic Research Institute for Northeast Asia (ERINA) ( email )

13th Floor, Bandaijima Building
Bandaijima 5-1, Chuo-ku
Niigata City, 9500078
Japan

HOME PAGE: http://https://www.erina.or.jp/en/

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