We use a panel data set of European firms to analyse the effects of domestic and international M&As on target firms' investment, growth and financial constraints. Combining propensity score matching with a difference-in-differences estimator, our results indicate that upon acquisition, target...

We develop a quantitative-oriented model that integrates the production and financing decisions of multinational corporations (MNCs). Firms can deploy their technology for production overseas and become MNCs. Due to frictions in obtaining external finance, the scale of the affiliates partially...