Innovation and Foreign Ownership

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 ma...

Full description

Saved in:
Bibliographic Details
Published inThe American economic review Vol. 102; no. 7; pp. 3594 - 3627
Main Authors Guadalupe, Maria, Kuzmina, Olga, Thomas, Catherine
Format Journal Article
LanguageEnglish
Published Nashville American Economic Association 01.12.2012
Subjects
Acquisitions
Business innovation
Business ownership
Capital per worker
Economic models
Economic statistics
Economic theory
Economics
Estimating techniques
Exports
Foreign investment
Foreign ownership
Foreign subsidiaries
Foreign trade
Industrial productivity
Industry
Innovation
Innovations
Labor productivity
Manufacturing
Multinational corporations
Panel data
Product innovation
Productivity
Shorter Papers
Studies
Technological innovation
Spain
Online AccessGet full text

Cover

More Information
Summary: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. [PUBLICATION ABSTRACT]
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.102.7.3594