Effects of foreign acquisitions on R&D and high-skill activities

Kent Eliasson (), Pär Hansson () and Markus Lindvert ()
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Kent Eliasson: Growth Analysis
Markus Lindvert: Growth Analysis

Small Business Economics, 2017, vol. 49, issue 1, No 9, 163-187

Abstract: Abstract Using Swedish microdata, we find no evidence for the concerns circulating in the public debate that foreign acquisitions lead to reductions in both R&D expenditures and high-skilled activities in targeted domestic firms for either MNEs or non-MNEs. Previous studies have only focused on larger firms. In this paper, we are able to study the impact on smaller firms (fewer than 50 employees), which is important because 90% of the firms acquired by foreign enterprises meet this criterion. For this group of firms, there is no information on R&D, but by using the register of educational attainment, we obtain data on the share of high-skilled labour in all Swedish firms, irrespective of size. Interestingly, we find that among smaller firms, foreign enterprises tend to acquire high-productive, skill-intensive firms (cherry-picking). After the acquisitions, skill upgrading appears in acquired smaller, non-MNE firms, particularly in the service sector.

Keywords: Foreign acquisitions; Skill upgrading; R&D intensity; Propensity score matching; F23; J24; O32; O33 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Effects of foreign acquisitions on R&D and high-skill activities (2015)
Working Paper: Effects of foreign acquisitions on R&D and high-skill activities (2015)
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DOI: 10.1007/s11187-016-9815-9

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