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Foreign Ownership and long-term Survival

Author

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  • Kronborg, Dorte

    (Department of Finance, Copenhagen Business School)

  • Thomsen, Steen

    (Department of Finance, Copenhagen Business School)

Abstract

Does foreign ownership enhance or decrease a firm’s chances of survival? Over the 100 year period 1895-2001 this paper compares the survival of foreign subsidiaries in Denmark to a control sample matched by industry and firm size. We find that foreign-owned companies have higher survival probability. On average exit risk for domestic companies is 2.3 times higher than for foreign companies. First movers like Siemens, Philips, Kodak, Ford, GM or Goodyear have been active in the country for almost a century. Relative foreign survival increases with company age. However, the foreign survival advantage appears to be eroded by globalization, it decreases over time and disappears at the end of the century.

Suggested Citation

  • Kronborg, Dorte & Thomsen, Steen, 2006. "Foreign Ownership and long-term Survival," Working Papers 2006-60, Copenhagen Business School, Department of Finance.
    • Handle: RePEc:hhs:cbsfin:2006_060
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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/6624
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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