The Geoeconomic Footprint of Chinese Acquisitions: Micro-Evidence on Target Firms

Chinese acquisitions of Western firms have become central to debates over technology transfer, national security, and investment screening. Understanding their economic consequences requires evidence on how acquired firms perform and reorganize under Chinese ownership. Using linked Swedish firm and worker registers for 1997–2021 and a matched, stacked difference-in-differences design, we examine majority acquisitions by Chinese and other foreign owners. Other foreign acquisitions raise labor productivity by about 6 percent and employment by about 14 percent on average, alongside increases in total factor productivity, workforce skills, and trade intensity. They also reshape management, strengthen trade links with the acquirer’s home country, and increase workers’ mobility to multinational enterprises. For Chinese acquisitions, we find no statistically detectable improvements in firm performance or comparable evidence of management restructuring, worker mobility, or trade integration. Chinese acquisitions are also rare in industries classified as security-sensitive. These findings provide a detailed account of the economic footprint of Chinese ownership in an advanced host economy. The pattern is consistent with acquisitions seeking assets valuable to the parent group rather than gains through restructuring the target.