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Foreign acquisition and the performance of New Zealand firms

This paper examines the firm-level determinants of foreign acquisitions of New Zealand companies, and the consequences for both the purchased firms and the workers within those firms. We follow a combined propensity score matching and difference-in-differences approach to identify and address endogenous selection of acquisition targets. The results suggest that foreign firms tend to target high-performing New Zealand companies. Acquired firms then exhibit higher growth in average wages and output, relative to similar domestic firms, but do not appear in general to increase their productivity or capital intensity. We find no evidence of differential survival rates for recently acquired foreign firms.

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File URL: http://www.rbnz.govt.nz/research_and_publications/discussion_papers/2011/dp11_08.pdf
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Paper provided by Reserve Bank of New Zealand in its series Reserve Bank of New Zealand Discussion Paper Series with number DP2011/08.

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Length: 30 p.
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:nzb:nzbdps:2011/08
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  1. Heyman, Fredrik & Gustavsson Tingvall, Patrik & Sjöholm, Fredrik, 2006. "Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data," Working Paper Series 674, Research Institute of Industrial Economics.
  2. Markusen, James R., 2002. "Multinational Firms and the Theory of International Trade," MPRA Paper 8380, University Library of Munich, Germany.
  3. Richard Fabling, 2009. "A Rough Guide to New Zealand's Longitudinal Business Database," Global COE Hi-Stat Discussion Paper Series gd09-103, Institute of Economic Research, Hitotsubashi University.
  4. Chiara Criscuolo & Ralf Martin, 2005. "Multinationals and US Productivity Leadership: Evidence from Great Britain," CEP Discussion Papers dp0672, Centre for Economic Performance, LSE.
  5. Richard Fabling, 2011. "Keeping it Together: Tracking Firms on New Zealand’s Longitudinal Business Database," Working Papers 11_01, Motu Economic and Public Policy Research.
  6. Bandick, Roger & Görg, Holger, 2009. "Foreign acquisition, plant survival, and employment growth," Working Papers 09-10, University of Aarhus, Aarhus School of Business, Department of Economics.
  7. Almeida, Rita, 2007. "The labor market effects of foreign owned firms," Journal of International Economics, Elsevier, vol. 72(1), pages 75-96, May.
  8. Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2010. "Innovation and Foreign Ownership," NBER Working Papers 16573, National Bureau of Economic Research, Inc.
  9. Robert E. Baldwin & Robert E. Lipsey & J. David Richards, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1, May.
  10. Richard Fabling & Lynda Sanderson, 2010. "Exporting and performance: Market entry, expansion and destination characteristics," Reserve Bank of New Zealand Discussion Paper Series DP2010/07, Reserve Bank of New Zealand.
  11. Christian Bellak, 2004. "How Domestic and Foreign Firms Differ and Why Does it Matter?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 483-514, 09.
  12. Andrew B. Bernard & Fredrik Sjoholm, 2003. "Foreign Owners and Plant Survival," NBER Working Papers 10039, National Bureau of Economic Research, Inc.
  13. Bertrand, Olivier, 2009. "Effects of foreign acquisitions on R&D activity: Evidence from firm-level data for France," Research Policy, Elsevier, vol. 38(6), pages 1021-1031, July.
  14. Hussinger, Katrin & Grimpe, Christoph, 2008. "Market and Technology Access Through Firm Acquisitions: Beyond One Size Fits All," ZEW Discussion Papers 08-037, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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