Plant Characteristics and Control Changes: Does Parent Firm¡¦s Nationality Matter?

Yanling Wang ()
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Yanling Wang: Norman Paterson School of International Affairs, Carleton University, Canada

Transnational Corporations Review, 2015, vol. 7, issue 1, 44-60

Abstract: Building on the literature regarding the motivations of plant control changes, this paper adds foreign and domestic ownership dimension. We differentiate plants' parent firms' nationality being foreign and domestic, pre- and post- control changes, to capture whether motivations leading to plant control changes manifest differently across and within the foreign-domestic ownership dichotomy. We group plants' control changes into four categories: plants shifted control from one domestic firm to another (D-to-D); from one domestic firm to one foreign firm (D-to-F), from one foreign firm to another (F-to-F), and from one foreign firm to one domestic firm (F-to-D). Using the sample of Canadian manufacturing plants from 1973 to 1999, we find that plants characteristics, along with their controlling firms' nationality, are instrumental to presage plants' control changes. There is a common set of factors in domestic plants leading to D-to-D and D-to-F control changes, reflecting the motivations of plant control changes as synergies or as market disciplinary forces. F-to-F control changes share some of the common factors as in D-to-F, indicating that foreign firms look for a specific set of factors in plants to acquire. The different pattern associated with F-to-D implies that it is a special category.

Keywords: Plant control changes; foreign; domestic (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:oul:tncr09:v:7:y:2015:i:1:p:44-60

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