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Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry

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Abstract

Does foreign ownership improve corporate performance, or do foreign firms merely select more productive targets for takeover? Do workers benefit from foreign acquisitions? We answer these questions by comparing the before/after change in several performance indicators of Czech firms subject to foreign takeover after 1997, i.e., after the initial waves of privatization were completed, with the corresponding performance change of matched companies that remained domestically owned until 2005. We find that the impact of foreign investors on domestic acquisitions is significantly positive only in non-exporting manufacturing industries or those with low import penetration, while it is small in both services and manufacturing industries competing on international markets.

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  • Stepan Jurajda & Juraj Stancik, 2012. "Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(4), pages 306-324, August.
  • Handle: RePEc:fau:fauart:v:62:y:2012:i:4:p:306-324
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    Cited by:

    1. repec:eee:ecosys:v:41:y:2017:i:4:p:537-568 is not listed on IDEAS
    2. Iwasaki, Ichiro & Kočenda, Evžen, 2017. "Are some owners better than others in Czech privatized firms? Even meta-analysis can’t make us perfectly sure," Economic Systems, Elsevier, vol. 41(4), pages 537-568.
    3. repec:prg:jnlpep:v:2017:y:2017:i:3:id:617:p:345-359 is not listed on IDEAS
    4. Hanousek, Jan & Kocenda, Evzen & Vozarova, Pavla, 2017. "Productivity and trade spillovers: Horizontal crowding-out versus vertical synergies in Europe as a response to the Foreign Direct Investment," CEPR Discussion Papers 12124, C.E.P.R. Discussion Papers.
    5. Jude, Cristina, 2012. "FDI, Productivity and Wages. New Evidence from a Romanian Matched Sample," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 36-55, December.
    6. Michael Moritz & Bastian Stockinger & Merlind Trepesch, 2017. "Multinational Resilience or Dispensable Jobs? German FDI and Employment in the Czech Republic Around the Great Recession," Prague Economic Papers, University of Economics, Prague, vol. 2017(3), pages 345-359.
    7. repec:bla:annpce:v:89:y:2018:i:2:p:263-322 is not listed on IDEAS
    8. Evzen Kocenda & Jan Hanousek, 2012. "Firm break-up and performance," Economics of Governance, Springer, vol. 13(2), pages 121-143, June.
    9. Ichiro IWASAKI & Satoshi MIZOBATA, 2018. "Post-Privatization Ownership And Firm Performance: A Large Meta-Analysis Of The Transition Literature," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 263-322, June.
    10. Štěpán Jurajda & Juraj Stančík, 2013. "Organization and Firm Performance in the Czech Republic," Prague Economic Papers, University of Economics, Prague, vol. 2013(1), pages 85-110.
    11. Evžen Kočenda & Jan Hanousek, 2011. "Vliv rozdělení českých podniků na ziskovost a produktivitu
      [Effect of the Czech Firms Break-Up on their Profitability and Productivity]
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(5), pages 579-598.

    More about this item

    Keywords

    productivity; foreign ownership; FDI;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F2 - International Economics - - International Factor Movements and International Business

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