Quantifying the Productivity Gains from Foreign Investment
Christian Fons-Rosen, Sebnem Kalemli-Ozcan, Bent Sorensen, Carolina Villegas-Sanchez, Vadym Volosovych , ( 131 )
Journal of International Economics

We revisit the relationship between foreign investment and productivity of acquired firms. First, we construct a panel firm-level dataset for eight advanced European countries covering domestic and foreign acquisitions together with detailed balance sheet information for the years 1999–2012. Second, we address the challenge of identifying a causal relation. To that end, we compare foreign to domestic acquisitions in addition to accounting for the impact of majority versus minority acquisitions after controlling for country and sector trends.

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