International Acquisitions and Labor Productivity in Serbian Cement Industry
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Abstract
This paper investigates the impact of international acquisitions on the productivity of acquired companies in the cement industry of the Republic of Serbia. We analyze the productivity of companies in the cement industry during the twenty-year period from 2000 to 2019. Acquisitions in the cement industry are one of the first international acquisitions realized in the Republic of Serbia. The multinational companies that took over the cement plants are from Switzerland, France and Greece. The paper analyzes the effects of international acquisitions on the productivity of acquired companies in the short and long term. The research results show that the productivity of all acquired companies improved both in the short term and in the long term after the acquisitions, with the largest productivity improvements being achieved in the short term. In addition, the research results show that Lafarge Serbia recorded the largest improvement in labor productivity, which, compared to other companies, optimized the number of employees and increased production volume.
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References
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Peng, Mike, Wang Denis, and Jiang Yi. 2008. "An Institution Based View of International Business Strategy: A Focus on Emerging Markets." Journal of International Business Studies, 39(5): 920 – 936.
Rondinell, Dennis, and Black Sylvia Sloan. 2000. "Multinational Strategic Alliances and Acquisitions in Central and Eastern Europe: Partnerships in Privatization." Academy of Management Executive, 14(4): 85 – 98.
Santalainen, Timo, Baliga Ram, and Leimman Jaak. 2003. "Straddling for Market Space: Transforming Estonian State-Owned Enterprises toward a Free Market Orientation." International Business & Economics Research Journal, 2(9): 75-89.
Savović, Slađana. 2017. "Organizational culture differences and post-acquisition performance: The mediating role of employee attitudes." Leadership and Organizational Development Journal, 38(5): 719-741.
Savović, Slađana, and Mimović Predrag. 2020. "Effects of cross-border acquisitions on efficiency and productivity of acquired companies: evidence from cement industry." International Journal of Productivity and Performance Management, ahead-of-print DOI: 10.1108/IJPPM-07-2020-0372
Schiffbauer, Marc, Siedschlag Iulia, and Ruane Frances. 2017. "Do foreign mergers and acquisitions boost firm productivity?" International Business Review, 26(6): 1124-1140.
Shimizu, Katsuhiko Hitt Michael, Vaidyanath Deepa, and Pisano Vincenzo. 2004. "Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future." Journal of International Management, 10(3): 307-353.
Statistical Office of Republic of Serbia. https://www.stat.gov.rs/, (accessed January 22, 2021)
Stošić, Ivan. 2014. "Trends in corporate restructuring in the world and Serbia." Poslovna ekonomija ,8(1): 157-176.
Uhlenbruck, Klaus. 2004. "Developing acquired foreign subsidiaries: the experience of MNEs in transition economies." Journal of International Business Studies, 35(2): 109-123.
Uhlenbruck, Klaus, and De Castro Julio. 2000. "Foreign Acquisitions in Central and Eastern Europe: Outcomes of Privatization in Transitional Economies." Academy of Management Journal, 43(3): 381 – 402.
Ataullah, Ali, Le Hang., and Sahota Amandeep. 2014. "Employee productivity, employment growth and the cross-border acquisitions by emerging market firms." Human Resource Management, 53(6): 987-1004.
Azdejković, Dragan, and Marković Dušan. 2016. "The impact of cross-border acquisitions in Serbia on productivity, wages and employment". Economic Annals, 61(211): 47-68.
Bandick, Roger. 2011. "Foreign Acquisitions, Wages and Productivity.", The World Economy, 34(1): 931-951.
Cogman, David, Jaslowitzer Patrick, and Rapp Marc Steffen. 2015. Why emerging-market companies acquire abroad. McKinsey&Company.
Commission for Protecton of Competition, Republic of Serbia. 2018, Report on the inquiry into competitive conditions on the cement market in the Republic of Serbia during the period 2014-2017. http://www.kzk.gov.rs/kzk/wp-content/uploads/2018/12/INQUIRY-into-Competitive-Conditions-on-the-Cement-Market-in-the-Republic-of-Serbia-during-the-Period-2014-2017.pdf (accessed 20 May, 2020)
Conyon, Martin, Girma Sourafel, Thompson Steve, and Wright Peter. 2002. "The productivity and wage effects of foreign acquisition in the United Kingdom." Journal of Industrial Economics, 50(1): 85-102.
Cullinan, Geoffrey, Le Roux Jean Marc, and Weddigen Rolf –Magnus (2004). "When to Walk Away from a Deal." Business Harvard Review, 82(4): 97 – 104.
Datta, Deepak, and Puia George. 1995. "Cross-border acquisitions: an examination of the influence of relatedness and cultural fit on shareholder value creation in US acquiring firms." Management International Review, 35(4): 337-359.
Deng, Ping, and Yang Monica. 2015. "Cross-border mergers and acquisitions by emerging market firms: A comparative investigation", International Business Review, 24(1):157-172.
Dikova, Desislava, and van Witteloostuijn Arjen. 2007. "Foreign direct investment mode choice: Entry and establishment modes in transition economies", Journal of International Business Studies, 38(6): 1013–1033.
Dunning, John, and Lundan Sarianna. 2008. Multinational Enterprises and the Global Economy, Edward Elgar Publishing Limited.
Erić, Dejan, Ivan Stošić, and Vuk Dapčević. 2019. "Post-Merger Performance in Financial Service Industry: A Case of the Republic of Serbia", Economic Analysis, 52(2): 28-42.
Estrin, Saul and Meyer Klaus. 2011. "Brownfield Acquisitions." Management International Review, 51: 483-509.
Faulkner, David, and Cambell Andrew. (2003). The Oxford Handbook of Strategy, Oxford University Press.
Gaughan, Patrick. 2002. Mergers, Acquisitions and Corporate Restructurings, Third edition, John Wiley & Sons.
Gioia, Carmine, and Thomsen Steen. 2004. "International acquisitions in Denmark, 1990-1997: Selection and performance", Applied Economics Quarterly, 50(1): 61-88.
Girma, Sourafel, and Görg Holger. 2002. "Foreign ownership, returns to scale and productivity: Evidence from UK manufacturing establishments.", CEPR Discussion Paper 3503.
Harris, Richard, and Robinson Catherine. 2002. "The impact of foreign acquisitions on total factor productivity: Plant‐level evidence from UK manufacturing, 1987‐1992." Review of Economics and Statistics, 84 (3): 562‐568.
Iankova, Elena, and Katz Jan. 2003. "Strategies for Political Risk Mediation by International Firms in Transition Economies: The Case of Bulgaria, Journal of World Business, 38(3), 182 – 203.
Karpaty, Patrik. 2007. "Productivity Effects of Foreign Acquisitions in Swedish Manufacturing: The FDI Productivity Issue Revisited." International Journal of the Economics of Business, 14(2): 241 – 260.
Khanna, Tarun, and Palepu Krishna. 2010. Winning in Emerging Markets: A Road Map for Strategy and Execution, Harvard Business Press.
KPMG. 1998. "Unlocking Shareholder Value." KPMG International.
Lebedev, Sergey, Peng Mike, Xie En, Stevens Charles. 2015. "Mergers and acquisitions in and out of emerging economies." Journal of World Business, 50 (4): 651-662.
Lehto, Eero, and Bockerman Petri. 2008. "Analyzing the Employment Effects of Mergers and Acquisitions". Journal of Economic Behavior & Organization, 68(1): 112-124.
Liu, Qing, and Qiu Larry. 2013. "Characteristics of Acquirers and Targets in Domestic and Cross‐Border Mergers and Acquisitions." Review of Development Economics, 17(3): 474-493.
Lodorfos, George, and Boateng Agyenim. 2006. "The role of culture in the merger and acquisition process: Evidence from European chemical industry." Management Decision, 44(10): 1405–1406.
Meyer E. Klaus, Estrin Saul. 2001. "Brownfield Entry in Emerging Markets." Journal of International Business Studies, 32(3): 575 – 584.
Meyer, Klaus. 2002. "Management challenges in privatization acquisitions in transition economies." Journal of World Business, 37(4): 266-276.
Modén, Karl-Markus, Norbäck Pehr-Johan, and Persson Lars. 2007. "Efficiency and ownership structure – The case of Poland." Research Institute of Industrial Economics, Stockholm, Sweden. IFN Working Paper 703.
Modén, Karl-Markus. 1997. "Foreign acquisitions of Swedish companies-Effects on R&D and productivity." The Research Institute of Industrial Economics (IUI), Stockholm.
Olford, Erin, and Otchere Isaac. 2016. "Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects." Pacific-Basin Finance Journal, 40(B): 438-455.
Peng, Mike, Wang Denis, and Jiang Yi. 2008. "An Institution Based View of International Business Strategy: A Focus on Emerging Markets." Journal of International Business Studies, 39(5): 920 – 936.
Rondinell, Dennis, and Black Sylvia Sloan. 2000. "Multinational Strategic Alliances and Acquisitions in Central and Eastern Europe: Partnerships in Privatization." Academy of Management Executive, 14(4): 85 – 98.
Santalainen, Timo, Baliga Ram, and Leimman Jaak. 2003. "Straddling for Market Space: Transforming Estonian State-Owned Enterprises toward a Free Market Orientation." International Business & Economics Research Journal, 2(9): 75-89.
Savović, Slađana. 2017. "Organizational culture differences and post-acquisition performance: The mediating role of employee attitudes." Leadership and Organizational Development Journal, 38(5): 719-741.
Savović, Slađana, and Mimović Predrag. 2020. "Effects of cross-border acquisitions on efficiency and productivity of acquired companies: evidence from cement industry." International Journal of Productivity and Performance Management, ahead-of-print DOI: 10.1108/IJPPM-07-2020-0372
Schiffbauer, Marc, Siedschlag Iulia, and Ruane Frances. 2017. "Do foreign mergers and acquisitions boost firm productivity?" International Business Review, 26(6): 1124-1140.
Shimizu, Katsuhiko Hitt Michael, Vaidyanath Deepa, and Pisano Vincenzo. 2004. "Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future." Journal of International Management, 10(3): 307-353.
Statistical Office of Republic of Serbia. https://www.stat.gov.rs/, (accessed January 22, 2021)
Stošić, Ivan. 2014. "Trends in corporate restructuring in the world and Serbia." Poslovna ekonomija ,8(1): 157-176.
Uhlenbruck, Klaus. 2004. "Developing acquired foreign subsidiaries: the experience of MNEs in transition economies." Journal of International Business Studies, 35(2): 109-123.
Uhlenbruck, Klaus, and De Castro Julio. 2000. "Foreign Acquisitions in Central and Eastern Europe: Outcomes of Privatization in Transitional Economies." Academy of Management Journal, 43(3): 381 – 402.