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Some of the most important aspects of globalization refer to free capital flows and internationalization of firm ownership. This paper reports on some preliminary observations considering two important phenomena that will influence future Croatian economic development: cross-border M&As and employment. So far, in the case of Croatia, cross-border M&As had attracted interest primarily as a source of fresh capital that would nurture future investments in technology, products and markets. Considering the shortage of capital and the slow rate of restructuring underwent by Croatian companies in the nineties, it was only natural that macroeconomic issues relating to capital flows FDI, gross fixed capital formation and employment would dominate discussion. The issue of relinquishing control that comes along the acquisition of ownership stakes of Croatian companies by foreign owners has come under criticism only more recently.

Without providing any final conclusion on the net benefits of cross-border M&As we tried to raise some evidence on the behavior of foreign owners as compared to domicile owners. In this paper we focus on employment, first because we believe employment may serve as an indicator of broad social impact of cross-border M&As and second, because of methodological reasons. We analyzed company data provided by the Croatian Securities Exchange now HANFA. We found that it is not so much the type nationality of owners that affects labor practices, but first and utmost, business performance in terms of profits and losses.
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Keywords: Croatia; FDI; cross-border M&As; employment; foreign owners

Document Type: Research Article

Publication date: 2012-01-01

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  • The International Journal of Management Cases (IJMC) developed in 2002 from its predecessor The Journal of Management Cases, and present case studies across a broad range of management disciplines. The IJMC is the official journal of the CIRCLE Research Centre. CIRCLE (Centre for International Research Consumers, Locations and their Environments) is a virtual research group spreading over 70 universities.
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