Evaluating the Causal Effect of Foreign Acquisition on Domestic Performances: The Case of Slovenian Manufacturing Firms

Sergio Salis ()

No wp803, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This paper investigates the impact of foreign acquisition in 1997 on the performances of a sample of Slovenian manufacturing firms. It uses the propensity score-matching estimation technique combined with the difference-in-differences approach to control for the potential bias arising from the non-random selection of acquired firms (endogeneity of foreign ownership). After confirming that foreign investors acquire the most productive firms in Slovenia, it shows that the productivity of such firms subsequently increases as a result of foreign takeover. This finding is consistent with the hypothesis that foreign firms transfer their technology to Slovenian affiliates.

Keywords: Foreign acquisition; productivity; propensity score; matching estimator (search for similar items in EconPapers)
JEL-codes: C14 D21 F23 (search for similar items in EconPapers)
Pages: pages
Date: 2006-01-01
New Economics Papers: this item is included in nep-eff, nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2006-803

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