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Picking "Lemons" or Picking "Cherries"? Domestic and Foreign Acquisitions in Norwegian Manufacturing


  • Ragnhild Balsvik
  • Stefanie A. Haller


We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, high-wage, high-productivity plants, while new domestic owners choose average performers of above-average size. Employment, labour productivity, and total factor productivity decline in domestic acquisition targets before acquisitions; only wages recover afterwards. Employment, wages and labour productivity increase after foreign acquisitions. The sample selection introduced by long-term comparisons and a focus on unique events introduces a downward bias into the results for domestic acquisitions and an upward bias for the foreign acquisitions. Copyright © The Economic and Social Research Institute 2010. Journal compilation © The editors of the "Scandinavian Journal of Economics" 2010 .

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  • Ragnhild Balsvik & Stefanie A. Haller, 2010. "Picking "Lemons" or Picking "Cherries"? Domestic and Foreign Acquisitions in Norwegian Manufacturing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 361-387, June.
  • Handle: RePEc:bla:scandj:v:112:y:2010:i:2:p:361-387

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    References listed on IDEAS

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    Cited by:

    1. Bürker, Matthias & Franco, Chiara & Minerva, G. Alfredo, 2013. "Foreign ownership, firm performance, and the geography of civic capital," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 964-984.
    2. repec:eee:enepol:v:107:y:2017:i:c:p:258-277 is not listed on IDEAS
    3. John P. Weche Geluebcke, 2012. "Foreign and Domestic Takeovers in Germany: First Comparative Evidence on the Post-acquisition Target Performance using new Data," Working Paper Series in Economics 249, University of Lüneburg, Institute of Economics.
    4. Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers 23, Institute for the Study of Labor (IZA).
    5. Siedschlag Iulia & Kaitila Ville & McQuinn John & Zhang Xiaoheng, 2014. "International Investment and Firm Performance: Empirical Evidence from Small Open Economies," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 662-687, December.
    6. Kokko Ari & Söderlund Bengt & Tingvall Patrik Gustavsson, 2014. "Redirecting International Trade: Contracts, Conflicts, and Institutions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 688-721, December.
    7. John P. Weche Gelübcke, 2013. "Foreign and Domestic Takeovers in Germany: Cherry-picking and Lemon-grabbing," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 59(4), pages 275-294.
    8. repec:eee:iburev:v:26:y:2017:i:6:p:1124-1140 is not listed on IDEAS
    9. Evgenii Monastyrenko, 2016. "Cross-Border M&As and Eco-Environmental Performance of European Energy Utilities," FIW Working Paper series 169, FIW.
    10. repec:ebd:wpaper:157 is not listed on IDEAS
    11. María García-Vega & Patricia Hofmann & Richard Kneller, "undated". "The Internationalisation of R&D and the Knowledge Production Function," Discussion Papers 12/02, University of Nottingham, GEP.
    12. María García-Vega & Patricia Hofmann & Richard Kneller, 2015. "Multinationals and the Globalization of R&D," Discussion Papers 2015-18, University of Nottingham, GEP.
    13. repec:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-016-9815-9 is not listed on IDEAS
    14. Schiffbauer, Marc & Siedschlag, Iulia & Ruane, Frances, 2017. "Do foreign mergers and acquisitions boost firm productivity?," International Business Review, Elsevier, vol. 26(6), pages 1124-1140.
    15. 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 31812, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    16. Eliasson, Kent & Hansson, Pär & Lindvert, Markus, 2015. "Effects of foreign acquisitions on R&D and high-skill activities," Working Paper Series, Center for Labor Studies 2015:2, Uppsala University, Department of Economics.

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