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Foreign acquisition, plant survival, and employment growth

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  • Roger Bandick
  • Holger Görg, Kiel Institute for the World Economy and University of Kiel and CEPR, Germany

This paper analyzes the effect of foreign acquisition on survival and employment growth of targets using data on Swedish manufacturing plants.We separate targeted plants into those within Swedish MNEs, Swedish exporting non-MNEs, and purely domestic firms. The results, controlling for possible endogeneity of acquisition using IV and propensity score matching approaches suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect is robust to controlling for domestic acquisitions and differs between horizontal and vertical acquisitions. We find robust positive employment growth effects only for exporters and only if the takeover is vertical.

Original languageEnglish
JournalCanadian Journal of Economics
Volume43
Issue2
Pages (from-to)547-573
Number of pages27
ISSN0008-4085
DOIs
Publication statusPublished - 2010

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