The Impact of Foreign Ownership on Company Growth

Jyrki Ali-Yrkkö

No 1081, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: This study analyses foreign-owned companies operating in Finland. Between 2001 and 2003 760 foreign companies either established a new site or acquired an existing unit in Finland. The goal of this paper is to study the develop- ment of these units. The results of statistical analyses are two-fold. First, estab- lished foreign-owned units (greenfields) have increased their employment annually on average 13-15 percent more than domestic-owned units established in the same period. Furthermore in terms of net sales, foreign-owned units grew, on average, 10-12 percent more rapidly than domestic units. Second, the impact of foreign ownership differs between greenfield investment and acquisitions. The results sug- gest that the impact of ownership change on employment and on net sales is simi- lar in domestic-to-foreign deals as in other deals.

Keywords: acquisition; greenfield; foreign; foreign-owned; takeover; development; employment; growth; Finland (search for similar items in EconPapers)
Pages: 24 pages
Date: 2007
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