Should R&D Champions be Protected from Foreign Takeovers?

Arbeitspapier

We analyze how the entry mode of Foreign Direct Investments (FDI) affects affiliate R&D activities. Using unique affiliate level data for Swedish multinational firms, we first present empirical evidence that acquired affiliates have a higher level of R&D intensity than greenfield (start-up) affiliates. This gap persists over time and with the age of the affiliates, as well as for different firm types and industries. To explain this finding, we develop an acquisition-investment-oligopoly model where we show that for a foreign acquisition to take place in equilibrium, the acquiring MNE must invest sufficiently in sequential R&D in the affiliate. Otherwise, rivals will expand their business, thus making the acquisition unprofitable. Two additional predictions of the model – that foreign firms acquire high-quality domestic firms and that the gap in R&D between acquired and greenfield affiliates decreases in acquisition transaction costs – are consistent with the data.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IFN Working Paper ; No. 772

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multinational Firms; International Business ; Market Structure, Firm Strategy, and Market Performance: General ; Firm Objectives, Organization, and Behavior: General ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
• Thema: FDI ; M&A ; Multinational firms ; R&D ; Betriebliche Forschung ; Übernahme ; Multinationales Unternehmen ; Direktinvestition ; Schweden

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bertrand, Olivier ; Nilsson Hakkala, Katariina ; Norbäck, Pehr-Johan ; Persson, Lars
• Ereignis: Veröffentlichung
• (wer): Research Institute of Industrial Economics (IFN)
• (wo): Stockholm
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/81339
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ