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International Investment and Firm Performance: Empirical Evidence from Small Open Economies

Author

Listed:
  • Siedschlag Iulia

    (The Economic and Social Research Institute (ESRI), Whitaker Square, Sir John Rogerson’s Quay, Dublin 2, Ireland)

  • Kaitila Ville

    (The Research Institute of the Finnish Economy (ETLA), Lonnrotinkatu 4 B, 00120 Helsinki, Finland)

  • McQuinn John

    (Cambridge Econometrics, Covent Garden, Cambridge CB1 2HT, United Kingdom)

  • Zhang Xiaoheng

    (Taipingxincun 2, Nanjing 210016, China)

Abstract

The global financial and economic crisis has severely affected foreign direct investment, particularly the cross-border mergers and acquisitions in advanced economies. This paper examines the effects of foreign mergers and acquisitions on labour productivity and employment growth over the period 2001-2009 in six small open economies in the European Union: Austria, Belgium, Denmark, Finland, the Netherlands and Sweden. We show that the severity of the crisis has been uneven across these six economies. Taken together, our estimates suggest that foreign direct investment had stronger effects on firm performance in services than in manufacturing.

Suggested Citation

  • Siedschlag Iulia & Kaitila Ville & McQuinn John & Zhang Xiaoheng, 2014. "International Investment and Firm Performance: Empirical Evidence from Small Open Economies," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 662-687, December.
    • Handle: RePEc:jns:jbstat:v:234:y:2014:i:6:p:662-687
    DOI: 10.1515/jbnst-2014-0603
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    Cited by:

    1. Campagnolo, Diego & Vincenti, Giampiero, 2022. "Cross-border M&As: The impact of cultural friction and CEO change on the performance of acquired companies," Journal of International Management, Elsevier, vol. 28(4).
    2. Bishwanath Goldar & Karishma Banga, 2018. "Country Origin of Foreign Direct Investment in Indi an Manufacturing and Its Impact on Productivity of Domestic Firms," Working Papers id:12730, eSocialSciences.
    3. Schiffbauer, Marc & Siedschlag, Iulia & Ruane, Frances, 2017. "Do foreign mergers and acquisitions boost firm productivity?," International Business Review, Elsevier, vol. 26(6), pages 1124-1140.
    4. Siedschlag, Iulia & Yan, Weijie, 2020. "Green investments and firm performance," Papers WP672, Economic and Social Research Institute (ESRI).

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    More about this item

    Keywords

    Multinational firms; productivity; employment; propensity score matching;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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