Abstract

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This paper asks whether synergies or managerial discipline operates in different ways across small versus large plants to affect the likelihood of mergers. Our findings indicate that those characteristics which provide the type of synergies upon which ownership changes rely are important factors leading to plant-ownership changes across most size classes. The magnitudes, however, are different across plant-size classes, with synergies generally being more important in larger plants.

Foreign plants in all size classes are more likely to be taken over. The effective rates of control change differ much more in the small than in the larger size classes. Compared to domestic plants, multinational plants in the smaller size classes contain relatively more of the type of intangible capital that makes them attractive vehicles for the transmission of new knowledge via takeover.

JEL codes: F23, L25

Keywords: plant size, ownership changes, mergers, foreign ownership