Foreign Entry into U.S. Manufacturing by Takeovers and the Creation of New Firms

Robert Lipsey and Zadia Feliciano ()

No 9122, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using U.S. Bureau of Economic Analysis data for individual foreign acquisitions and new establishments in the U.S from 1988 to 1998, and aggregate data for 1980 to 1998, we find that acquisitions and establishments of new firms tend to occur in periods of high U.S. growth and take place mainly in industries in which the investing country has some comparative advantage in exporting. New establishments are largely in industries of U.S. comparative disadvantage, and the relation of U.S. comparative advantage to takeovers is also negative, but never significant. High U.S. stock prices, industry profitability, and industry growth discourage takeovers. High U.S interest rates and high investing country growth and currency values encourage takeovers. Direct investments in acquisitions and new establishments thus tend to flow in the same direction as trade. They originate in countries with comparative advantages in particular industries and flow to industries of U.S. comparative disadvantage.

JEL-codes: F21 F23 (search for similar items in EconPapers)
Date: 2002-08
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published as Zadia M Feliciano & Robert E Lipsey, 2017. "Foreign Entry into US Manufacturing by Takeovers and the Creation of New Firms," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(1), pages 1-16, January.

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