Department of Business Development and Technology

Foreign acquisitions, domestic multinationals, and R&D

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

The aim of this paper is to evaluate the causal effect of foreign acquisition on R&D intensity in targeted domestic firms. We are able to distinguish domestic multinationals and non-multinationals, which allows us to investigate the fear that the change in ownership of domestic to foreign multinationals leads to a reduction in R&D activity in the country. We use unique and rich firm level data for the Swedish manufacturing sector and micro-econometric estimation strategies in order to control for the potential endogeneity of the acquisition decision. Overall, our results give no support to the fears that foreign acquisition of domestic firms lead to a relocation of R&D activity in Swedish MNEs. Rather, this paper finds robust evidence that foreign acquisitions lead to increasing R&D intensity in acquired domestic MNEs and non-MNEs.
Original languageEnglish
JournalThe Scandinavian Journal of Economics
Volume116
Issue4
Pages (from-to)1091-1115
Number of pages25
ISSN0347-0520
DOIs
Publication statusPublished - 2014

    Research areas

  • Multinational firms, R&D, Foreign acquisitions

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