Ownership Change, Multinationals, and Growth of New Technology-Based Firms

Jing Xiao

No 2014/24, Papers in Innovation Studies from Lund University, CIRCLE - Centre for Innovation Research

Abstract: New technology-based firms (NTBFs) are usually restricted by limited ownership and management structures. This paper explores whether acquisition, particularly that by multinational enterprises (MNEs), promotes the growth of NTBFs. Based on micro-level longitudinal data, we construct a large sample of Swedish NTBFs entering from 1997 to 2002 and follow them until 2009. This paper uses fixed effects models combined with inverse-probability-of-treatment weights (IPTW) to account for endogeneity of acquisition arising from both time-invariant and time-variant heterogeneity across firms. The findings show that acquisition by Swedish MNEs significantly improves the growth of NTBFs, but only when it comes to the growth in employees. In contrast, acquisition by both foreign MNEs and Swedish domestic enterprises are not found to have any significant effects on the growth in either employees or sales of NTBFs.

Keywords: acquisition; firm growth; new technology-based firms; multinational enterprises; longitudinal data; fixed effects models; inverse-probability-of-treatment weights; Sweden (search for similar items in EconPapers)
JEL-codes: F23 G34 L22 O33 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014-11-05
New Economics Papers: this item is included in nep-cse, nep-ent and nep-sbm
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Related works:
Journal Article: The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lucirc:2014_024

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