International Joint Ventures Transformed : Foreign Buyouts, Firm Performance and Managerial Turnover

We study the effects of changes in organizational form on firm performance and management turnover. Our analysis sheds light on whether there are gains to be exploited by transitioning from product market relationships such as joint ventures to wholly owned subsidiaries through mergers and acquisitions. Using a difference-in-differences propensity score matching estimator to control for selection bias, we show that performance is similar across both organizational forms. However, foreign buyout accompanied by management turnover leads to performance gains. Our findings suggest that the gains from M&As are due both to synergies and management turnover