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Guadalupe, Maria,
Olga Kuzmina, and
Catherine Thomas. 2012. "Innovation and Foreign Ownership."
,
102(7): 3594-3627.
Show Article Details
DOI: 10.1257/aer.102.7.3594
Abstract:This paper uses a rich panel dataset of Spanish manufacturing firms (1990-2006) and a propensity score reweighting estimator to show that multinational firms acquire the most productive domestic firms, which, on acquisition, conduct more product and process innovation
(simultaneously adopting new machines and organizational practices) and adopt foreign technologies, leading to higher productivity. We propose a model of endogenous selection and innovation in heterogeneous firms that explains both the observed selection patterns and the innovation decisions. Further, we show in the data that innovation upon acquisition is associated with the increased market scale provided by the parent firm.
Additional links:
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Online Appendix
Authors:
Guadalupe, Maria (INSEAD, Fontainebleau)
Kuzmina, Olga (New Economic School, Moscow)
Thomas, Catherine (London School of Economics and Political Science)
JEL Classifications:
D22: Firm Behavior: Empirical Analysis
D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
F23: Multinational Firms; International Business
G34: Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
L60: Industry Studies: Manufacturing: General
O31: Innovation and Invention: Processes and Incentives
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