IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/1486.html
   My bibliography  Save this paper

National Security and Corporate Investment

Author

Listed:
  • Capkun, Vedran

    (HEC Paris)

  • Grazioli, Francesco

    (ESCP Business School)

Abstract

We examine whether and how the implementation of national security policies by the Committee on Foreign Investment in the United States (CFIUS) affects corporate investment. CFIUS can block a foreign takeover of a US company when its closing threatens to impair the national security of the United States. On a sample of 41,918 firm-year observations (6,192 US incorporated listed firms) over the 2008–2019 period, we find that CFIUS interventions reduce corporate investment by firms in industries of national security interest. We also document a decrease in corporate investment following the 2016 US presidential election, which increased the likelihood of CFIUS interventions. The effects are more pronounced among firms that are financially constrained and more exposed to foreign investments. Our results may be of interest to regulators who have recently adopted CFIUS-like mechanisms to protect their critical assets from foreign takeovers.

Suggested Citation

  • Capkun, Vedran & Grazioli, Francesco, 2023. "National Security and Corporate Investment," HEC Research Papers Series 1486, HEC Paris.
    • Handle: RePEc:ebg:heccah:1486
    DOI: 10.2139/ssrn.4505931
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4505931
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.2139/ssrn.4505931?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    National Security; CFIUS; Corporate Investment;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:1486. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antoine Haldemann (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.