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Technology Transfer from Acquisition FDI and the Absorptive Capacity of Domestic Firms: An Empirical Investigation

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  • Sourafel Girma

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Abstract

This paper seeks to establish the role of absorptive capacity in technology transfer from acquisition FDI in U.K. manufacturing. It finds that the rate of productivity change following a foreign take-over is higher the higher the pre-acquisition productivity level of the acquired firm, indicating the importance of absorptive capacity. However, beyond some critical level of initial productivity, the rate of technology transfer due to foreign acquisition starts to decline. It seems that U.K. acquisition targets that had been operating nearer the domestic technology frontier have less to gain from their association with foreign multinationals. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11079-005-5874-2
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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 16 (2005)
Issue (Month): 2 (April)
Pages: 175-187

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Handle: RePEc:kap:openec:v:16:y:2005:i:2:p:175-187

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Web page: http://www.springerlink.com/link.asp?id=100323

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Keywords: foreign direct investment; acquisitions; productivity;

References

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  9. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
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Citations

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Cited by:
  1. Iwasaki, Ichiro & Suganuma, Keiko, 2014. "Foregign Direct Investment and Regional Economic Growth in Russia: An Econometric Assessment," RRC Working Paper Series 44, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
  2. Guido Fioretti, 2002. "Recognizing Investment Opportunities at the Onset of Recoveries," Macroeconomics 0207008, EconWPA.
  3. Lale Berkoz & Sevkiye Sence Turk, 2005. "Factors Influencing The Choice Of Fdi Locations In Turkey," ERSA conference papers ersa05p434, European Regional Science Association.
  4. Tsai, Kuen-Hung & Wang, Jiann-Chyuan, 2009. "External technology sourcing and innovation performance in LMT sectors: An analysis based on the Taiwanese Technological Innovation Survey," Research Policy, Elsevier, vol. 38(3), pages 518-526, April.
  5. Chen, Wenjie, 2011. "The effect of investor origin on firm performance: Domestic and foreign direct investment in the United States," Journal of International Economics, Elsevier, vol. 83(2), pages 219-228, March.
  6. Cristina Jude, 2012. "Horizontal and Vertical Technology Spillovers from FDI in Eastern Europe," Working Papers halshs-00828022, HAL.
  7. Antonios Georgopoulos & George Argyros & Giota Boura, 2008. "Which Targets Stimulate Cross-border Acquisitions? An Empirical Investigation of Industrial Organization and Trade Factors within a Competition Framework of International and Domestic Acquisition Targ," Journal of Industry, Competition and Trade, Springer, vol. 8(1), pages 55-72, March.
  8. Georgopoulos, Antonios & Preusse, Heinz Gert, 2009. "Cross-border acquisitions vs. Greenfield investment: A comparative performance analysis in Greece," International Business Review, Elsevier, vol. 18(6), pages 592-605, December.
  9. Tsai, Kuen-Hung & Wang, Jiann-Chyuan, 2008. "External technology acquisition and firm performance: A longitudinal study," Journal of Business Venturing, Elsevier, vol. 23(1), pages 91-112, January.

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