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Foreign acquisition, plant survival, and employment growth

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  • Bandick, Roger

    ()
    (Department of Economics, Aarhus School of Business)

  • Görg, Holger

    (Kiel Institute for the World Economy)

Abstract

This paper analyses the effect of foreign acquisition on survival probability and employment growth of target plant using data on Swedish manufacturing plants during the period 1993- 2002. An improvement over previous studies is that we take into account firm level heterogeneity by separating the targeted plants into those within Swedish MNEs, Swedish exporting non-MNEs, and purely domestic firms before foreign takeover. The results, controlling for possible endogeneity of the acquisition dummy using an IV and propensity score matching approach suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect differs depending on whether the acquisition is horizontal or vertical. We also find robust positive employment growth effects only for exporters, and only if the takeover is vertical, not horizontal

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 09-10.

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Length: 51 pages
Date of creation: 29 Sep 2009
Date of revision:
Handle: RePEc:hhs:aareco:2009_010

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Keywords: Acquisitions; plant survival; employment growth; multinational enterprises;

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References

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Citations

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Cited by:
  1. Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers, Institute for the Study of Labor (IZA) 23, Institute for the Study of Labor (IZA).
  2. Natália Pimenta Monteiro & Geoff Stewart, 2013. "Scale, Scope and Survival: A Comparison of Cooperative and Capitalist Modes of Production," NIPE Working Papers, NIPE - Universidade do Minho 08/2013, NIPE - Universidade do Minho.
  3. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  4. Richard Fabling & Lynda Sanderson, 2014. "Foreign acquisition and the performance of New Zealand firms," New Zealand Economic Papers, Taylor & Francis Journals, Taylor & Francis Journals, vol. 48(1), pages 1-20, April.
  5. Spaliara, Marina-Eliza & Tsoukas, Serafeim, 2013. "What matters for corporate failures in Asia? Exploring the role of firm-specific characteristics during the Asian crisis," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 26(C), pages 83-96.
  6. García-Vega, María & Guariglia, Alessandra & Spaliara, Marina-Eliza, 2012. "Volatility, financial constraints, and trade," International Review of Economics & Finance, Elsevier, Elsevier, vol. 21(1), pages 57-76.
  7. Fernandes, Ana M. & Paunov, Caroline, 2012. "The risks of innovation : are innovating firms less likely to die ?," Policy Research Working Paper Series 6103, The World Bank.
  8. Joze P. Damijan & Crt Kostevc & Matija Rojec, 2012. "Growing lemons and cherries? Pre- and post-acquisition performance of foreign-acquired firms in new EU member states," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 31812, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  9. Furlan, Benjamin & Oberhofer, Harald & Winner , Hannes, 2014. "A Note on Merger and Acquisition Evaluation," Working Papers in Economics and Finance, University of Salzburg 2014-2, University of Salzburg.
  10. Serafeim Tsoukas, 2012. "Firm Survival and Financial Development: Evidence from a Panel of Emerging Asian Economies," Working Papers 142012, Hong Kong Institute for Monetary Research.
  11. Ronald Bachmann & Daniel Baumgarten & Joel Stiebale, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0268, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  12. Bruce Blonigen & Benjamin Liebman & Wesley Wilson, 2013. "Antidumping and Production-Line Exit: The Case of the US Steel Industry," Review of Industrial Organization, Springer, Springer, vol. 42(4), pages 395-413, June.

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