Does Ownership Matter?The Impact of Foreign Takeovers on Innovation andProductivity Performance
2006 (English)Report (Other academic)
Recent debate has focused on how foreign direct investments and foreign take-oversmay affect growth and welfare. In this study we have methodologically approximatedforeign-ownership by foreign take-over and raised the question: how would a firm’sbehaviour and performance have been if a foreign owner had not acquired the firm?The analysis is based on a sample of 5 186 firm-level observations in four Nordiccountries, of which approximately 30 percent of the firms have foreign owners. Usingan empirical approach that accounts for both selection bias and simultaneity bias, weestablish some new findings regarding foreign ownership. First, no robust differencein the propensity to be innovative can be established. Second, the group of innovativefirms, foreign-owned multinationals are generally outperformed by domesticmultinationals in R&D and innovation engagement. Finally, the results on laborproductivity are at variance with the findings in a large number of comparisonstudies. We find that foreign take-over of firms is neutral with respect to laborproductivity, and hence the issue of welfare gain and welfare drain is turned into anon-issue.
Place, publisher, year, edition, pages
CESIS, KTH Royal Institute of Technology , 2006. , 30 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 69
Multinational enterprises, Take-Over, Corporate governance, Crosscountry comparison, Spillovers, R&D, Innovation, Productivity
IdentifiersURN: urn:nbn:se:kth:diva-72308OAI: oai:DiVA.org:kth-72308DiVA: diva2:487446
Qc 201202082012-02-082012-01-312012-02-08Bibliographically approved