Foreign acquisition, plant survival, and employment growth

Roger Bandick and Holger Görg

Canadian Journal of Economics/Revue canadienne d'économique, 2010, vol. 43, issue 2, 547-573

Abstract: Abstract This paper analyzes the effect of foreign acquisition on survival and employment growth of targets using data on Swedish manufacturing plants. We separate targeted plants into those within Swedish MNEs, Swedish exporting non‐MNEs, and purely domestic firms. The results, controlling for possible endogeneity of acquisition using IV and propensity score matching approaches suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect is robust to controlling for domestic acquisitions and differs between horizontal and vertical acquisitions. We find robust positive employment growth effects only for exporters and only if the takeover is vertical. Ce mémoire analyze l'effet d'une acquisition étrangère sur la survie et sur la croissance de l'emploi dans les firmes ciblées à l'aide de données sur les établissements manufacturiers suédois. On sépare les établissements ciblés en trois groupes: ceux qui sont parties d'un multinationale suédoise, ceux qui sont des établissements suédois qui exportent mais ne sont pas des multinationales, et les entreprises purement domestiques. Contrôlant pour une possible endogénéité de l'acquisition, les résultats suggèrent que l'acquisition par des propriétaires étrangers accroît la vie des établissements acquis seulement si c'était un établissement exportateur. L'effet est robuste si on contrôle pour les acquisitions domestiques, et est différent selon que l'acquisition est horizontale ou verticale. On trouve des effets positifs robustes sur la croissance de l'emploi seulement pour les exportateurs, et seulement si l'acquisition est verticale.

Date: 2010
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https://doi.org/10.1111/j.1540-5982.2010.01583.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:canjec:v:43:y:2010:i:2:p:547-573

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