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Foreign acquisition and the performance of New Zealand firms

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Abstract

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.

Suggested Citation

  • Richard Fabling & Lynda Sanderson, 2011. "Foreign acquisition and the performance of New Zealand firms," Reserve Bank of New Zealand Discussion Paper Series DP2011/08, Reserve Bank of New Zealand.
    • Handle: RePEc:nzb:nzbdps:2011/08
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    Citations

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    Cited by:

    1. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.
    2. 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.
    3. Lynda Sanderson, 2013. "Sources of international investment data in the Longitudinal Business Database," Treasury Working Paper Series 13/31, New Zealand Treasury.
    4. David C Mare & Lynda Sanderson & Richard Fabling, 2014. "Earnings and Employment in Foreign-owned Firms," Treasury Working Paper Series 14/16, New Zealand Treasury.
    5. Richard Fabling, 2021. "Living on the edge: An anatomy of New Zealand’s most productive firms," Working Papers 21_01, Motu Economic and Public Policy Research.
    6. Paul Wabiga & Neil Rankin, 2023. "Foreign acquisition and firm performance in sub‐Saharan Africa: Empirical evidence from Ghana," South African Journal of Economics, Economic Society of South Africa, vol. 91(2), pages 242-269, June.
    7. Paul Conway, 2016. "Achieving New Zealand's productivity potential," Working Papers 2016/01, New Zealand Productivity Commission.
    8. Paul Conway & Lisa Meehan & Guanyu Zheng, 2015. "Do New Zealand firms catch up to the domestic productivity frontier?," Working Papers 2015/03, New Zealand Productivity Commission.

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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