Quantifying Productivity Gains from Foreign Investment

Sørensen, Bent E, Kalemli-Özcan, Sebnem, Vadym Volosovych, Christian Fons-Rosen and Carolina Villegas-Sanchez ()
Authors registered in the RePEc Author Service: Sebnem Kalemli-Ozcan

No 9434, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We revisit the relationship between foreign investment and productivity of acquired firms. First, we construct a panel firm-level dataset for eight advanced European countries covering domestic and foreign acquisitions together with detailed balance sheet information for the years 1999-2012. Second, we address the challenge of identifying a causal relation. To that end, we compare foreign to domestic acquisitions in addition to accounting for the impact of majority versus minority acquisitions after controlling for country and sector trends. The productivity of foreign acquired affiliates increases modestly after four years, but only when majority stakes are acquired by foreigners. Our results are driven by foreign acquisitions and not by foreign divestment.

Keywords: Multinationals; Selection; Majority ownership; Advanced countries (search for similar items in EconPapers)
JEL-codes: E32 F15 F36 O16 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ifn, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Related works:
Journal Article: Quantifying productivity gains from foreign investment (2021)
Working Paper: Quantifying Productivity Gains from Foreign Investment (2020)
Working Paper: Quantifying Productivity Gains from Foreign Investment (2013)
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