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The Innovation and Productivity Effect of Foreign Take-Over of National Assets
KTH, School of Industrial Engineering and Management (ITM), Centres, Centre of Excellence for Science and Innovation Studies, CESIS. KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics.
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics. KTH, School of Industrial Engineering and Management (ITM), Centres, Centre of Excellence for Science and Innovation Studies, CESIS.ORCID iD: 0000-0002-5871-8571
2008 (English)Report (Other academic)
Abstract [en]

Over the past decades, there has been a dramatic increase in the foreign-ownership offirms in the four Nordic countries Denmark, Finland, Norway and Sweden. This increasehas generated interest in the welfare effect of foreign take-over of national assets. In thispaper we ask: how would a firm’s behaviour and performance have been if a foreignowner had not acquired the firm? The analysis is based on a sample of 5 186 firm-levelobservations in four Nordic countries, of which close to 30 percent are owned by foreigncompanies. Using an empirical approach that accounts for both selection bias andsimultaneity bias, we establish some new findings regarding foreign ownership. First, norobust difference in the propensity to be innovative can be established. Second, amongthe group of innovative firms, foreign-owned multinationals are generally outperformedby domestic multinationals in R&D and innovation engagement. Third, despite the factthat domestic multinationals are considerably more involved in national innovationsystems than other firms, they are not producing more innovation per R&D-dollar,controlling for firm size, human capital and industry. Finally, we find that foreign takeoverof firms is neutral with respect to labour productivity, and hence that no evidence ofwelfare gain or welfare drain of foreign ownership can be established.

Place, publisher, year, edition, pages
CESIS, KTH Royal Institute of Technology , 2008. , 32 p.
Series
CESIS Working Paper Series in Economics and Institutions of Innovation, 141
Keyword [en]
Multinational enterprises, Take-Over, Corporate governance, Cross-country comparison, Spillovers, R&D, Innovation, Productivity
National Category
Economics
Identifiers
URN: urn:nbn:se:kth:diva-72363OAI: oai:DiVA.org:kth-72363DiVA: diva2:487526
Note
QC 20120209Available from: 2012-02-09 Created: 2012-01-31 Last updated: 2012-02-09Bibliographically approved

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CESISWP141(215 kB)204 downloads
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CiteExportLink to record
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Cite
Citation style
  • apa
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Language
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  • Other locale
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Output format
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