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Essays on Access to External Finance, Acquisitions and Productivity
Ondko, Peter ; Hanousek, Jan (advisor) ; Jovanovic, Boyan (referee) ; Ortiz-Molina, Hernan (referee)
This thesis consists of three chapters that are empirical investigations of classical questions in the financial and industrial economics literature on the influence of institutions and industry conditions on the firm's access to finance, the propensity to merge, and productivity. In the first chapter, coauthored with Jan Bena, we examine whether financial markets development facilitates the efficient allocation of resources. Using European micro-level data for 1996-2005, we show that firms in industries with high growth opportunities use more external finance in financially more developed countries. This result is particularly strong for firms that are more likely to be financially constrained and dependent on domestic financial markets, such as small and young firms. Our findings are robust to controlling for technological determinants of external finance needs and to using different proxies for growth opportunities. In the second chapter, I investigate the role of productivity in the selection of firms into acquisitions and whether acquisitions lead to productivity gains. Using matching methodology and a large dataset of domestic acquisitions among public and private firms in Europe over the period 1998-2008, I find that first, targets are under-performing before engaging in horizontal...
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