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