engleski

Internationalization of Croatian firms though foreign acquisitions - impact on employment

Some of the most important aspects of internationalization definitely refer to free capital flows and internationalization of firm ownership. We note that FDI inflows to transition economies most often relate to the privatization process and so take the form of strategic investments conducted through acquisitions. In our paper we investigate the relationship between public expectations and facts concerning the impact of foreign owners on employment. In the case of Croatia, especially during the late nineties, markets were starved of investment capital, but also of entrepreneurial initiative. Products lacked consumer appeal and firms lacked strategies (and funds) to enter new markets. In such settings FDI and “ strategic investors” became the panacea for politicians, government administrators, managers and workers alike, however, with one drawback, foreign owners were feared for the plausible threat of redesigning the acquired business through organizational restructuring that would largely be based on cost- cuts and lay-offs. In the paper we propose to analyze concrete data on the post acquisition behavior of new foreign owners concerning labor practices and to compare them to shifts in employment in firms that remained under state ownership or were sold to private domestic owners. The data for the study was extracted from the Croatian securities database spanning a five year period (from 2000 onwards). We believe this research would contribute to drawing more informed arguments to critically assess the impact of foreign owners on the Croatian economy and to individual firms.

ownership internationalization; employment; post-acquisition performance; Croatia

Rad bi trebao biti objevljen u integralnoj verziji tijekom 2006.