Cross-Border Acquisition or Greenfield Entry: Does it Matter for Affiliate R&D?
This paper investigates how the entry mode of foreign direct investment (FDI) affects the affiliate R&D activities using unique data on Swedish multinational firms over a long period of time (1970 to 1998). On average, acquired affiliates are more likely to do R&D and have a higher level of R&D intensity than affiliates created by greenfield entry. This difference in observed R&D is explained by differences in parent, affiliate, industry and country characteristics as well as by different reactions to these characteristics, as predicted by the recent theoretical literature on international mergers and acquisitions (M&As). The results also suggest that M&As are, to a larger extent, motivated by asset-seeking motives than greenfield entry, especially in the 1990s.
|Date of creation:||30 Jan 2007|
|Contact details of provider:|| Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden|
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Olivier Bertrand & Habib Zitouna, 2006. "Trade Liberalization and Industrial Restructuring: The Role of Cross-Border Mergers and Acquisitions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 479-515, June.
- Hans Gersbach & Armin Schmutzler, 2011.
"Foreign direct investment and R&D-offshoring,"
Oxford Economic Papers,
Oxford University Press, vol. 63(1), pages 134-157, January.
- Gersbach, Hans & Schmutzler, Armin, 2006. "Foreign Direct Investment and R&D Offshoring," CEPR Discussion Papers 5766, C.E.P.R. Discussion Papers.
- Hans Gersbach & Armin Schmutzler, 2006. "Foreign Direct Investment and R&D offshoring," SOI - Working Papers 0606, Socioeconomic Institute - University of Zurich.
- Edwin Mansfield & David Teece & Anthony Romeo, 2008. "Overseas Research and Development by US-Based Firms," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 12, pages 297-306 World Scientific Publishing Co. Pte. Ltd..
- Mansfield, Edwin & Teece, David & Romeo, Anthony, 1979. "Overseas Research and Development by US-Based Firms," Economica, London School of Economics and Political Science, vol. 46(182), pages 187-196, May.
- Volker Nocke & Stephen Yeaple, 2008. "An Assignment Theory of Foreign Direct Investment," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 529-557.
- Volker Nocke & Stephen Yeaple, 2004. "An Assignment Theory of Foreign Direct Investment," PIER Working Paper Archive 05-003, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Stephen Yeaple & Volker Nocke, 2005. "An Assignment Theory of Foreign Direct Investment," 2005 Meeting Papers 146, Society for Economic Dynamics.
- Volker Nocke & Stephen Yeaple, 2004. "An Assignment Theory of Foreign Direct Investment," NBER Working Papers 11003, National Bureau of Economic Research, Inc.
- Bjorvatn, Kjetil, 2004. "Economic integration and the profitability of cross-border mergers and acquisitions," European Economic Review, Elsevier, vol. 48(6), pages 1211-1226, December.
- Hewitt, Gary, 1980. "Research and Development Performed Abroad by U.S. Manufacturing Multinationals," Kyklos, Wiley Blackwell, vol. 33(2), pages 308-327.
- Blonigen, Bruce A, 1997. "Firm-Specific Assets and the Link between Exchange Rates and Foreign Direct Investment," American Economic Review, American Economic Association, vol. 87(3), pages 447-465, June.
- Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
- Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
- Hakanson, Lars & Nobel, Robert, 1993. "Foreign research and development in Swedish multinationals," Research Policy, Elsevier, vol. 22(5-6), pages 373-396, November.
- Gomes-Casseres, Benjamin, 1989. "Ownership structures of foreign subsidiaries : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 11(1), pages 1-25, January.
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- Andersson, Thomas & Svensson, Roger, 1994. " Entry Modes for Direct Investment Determined by the Composition of Firm-Specific Skills," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(4), pages 551-560.
- Bertrand, Olivier & Zuniga, Pluvia, 2006. "R&D and M&A: Are cross-border M&A different? An investigation on OECD countries," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 401-423, March.
- Olivier Bertrand & Pluvia Zuniga, 2004. "R&D and M&A : Are cross-border M&A different ? An investigation on OECD countries," Cahiers de la Maison des Sciences Economiques bla04072, Université Panthéon-Sorbonne (Paris 1).
- Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
- Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
- Maria Petit & Francesca Sanna-Randaccio, 1998. "Technological innovation and multinational expansion: A two-way link?," Journal of Economics, Springer, vol. 68(1), pages 1-26, February.
- Sanjaya Lall, 1979. "Multinationals and market structure in an open developing economy: The case of Malaysia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 115(2), pages 325-350, June.
- Slangen, Arjen & Hennart, Jean-François, 2007. "Greenfield or acquisition entry: A review of the empirical foreign establishment mode literature," Journal of International Management, Elsevier, vol. 13(4), pages 403-429, December.
- Slangen, A.H.L. & Hennart, J-F., 2007. "Greenfield or Acquisition Entry: A Review of the Empirical Foreign Establishment Mode Literature," ERIM Report Series Research in Management ERS-2007-059-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Mattoo, Aaditya & Olarreaga, Marcelo & Saggi, Kamal, 2004. "Mode of foreign entry, technology transfer, and FDI policy," Journal of Development Economics, Elsevier, vol. 75(1), pages 95-111, October.
- Mattoo, Aaditya & Olarreaga, Marcelo & Saggi, Kamal, 2001. "Mode of Foreign Entry, Technology Transfer, and FDI Policy," CEPR Discussion Papers 2870, C.E.P.R. Discussion Papers.
- Head, Keith & Ries, John, 2008. "FDI as an outcome of the market for corporate control: Theory and evidence," Journal of International Economics, Elsevier, vol. 74(1), pages 2-20, January.
- Tarja K. Viitanen, 2004. "The Impact of Children on Female Earnings in Britain," Discussion Papers of DIW Berlin 415, DIW Berlin, German Institute for Economic Research.
- C Patrick Woodcook & Paul W Beamish & Shige Makino, 1994. "Ownership-Based Entry mode Strategies and International Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 253-273, June.
- Cécile Wetzels & Aslan Zorlu, 2003. "Wage effects of motherhood: a double selection approach," NIMA Working Papers 22, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
- Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," American Economic Review, American Economic Association, vol. 92(2), pages 198-204, May.
- Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," NBER Working Papers 8740, National Bureau of Economic Research, Inc.
- Belderbos, Rene, 2001. "Overseas innovations by Japanese firms: an analysis of patent and subsidiary data," Research Policy, Elsevier, vol. 30(2), pages 313-332, February.
- Kumar, Nagesh, 2001. "Determinants of location of overseas R&D activity of multinational enterprises: the case of US and Japanese corporations1," Research Policy, Elsevier, vol. 30(1), pages 159-174, January.
- Walter G. Park & Juan Carlos Ginarte, 1997. "Intellectual Property Rights And Economic Growth," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 51-61, July. Full references (including those not matched with items on IDEAS)