When do foreign subsidiaries outperform local firms?

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This study explores when foreign subsidiaries outperform comparable local firms by evaluating the performance of local firms acquired by multinationals vs continuing local firms. This comparison allows us to single out foreign ownership effects. We employ the propensity score matching method and difference-indifferences approach in order to control for the endogeneity problem inherent in multinational firms' acquisition decisions. We find strong evidence that foreign-acquired local firms outperform comparable local firms in China, especially when the foreign firm acquires local target firms with higher absorptive capacity or with modernized ownership structure.
Publisher
PALGRAVE MACMILLAN LTD
Issue Date
2013-10
Language
English
Article Type
Article
Keywords

PRODUCTIVITY; SURVIVAL

Citation

JOURNAL OF INTERNATIONAL BUSINESS STUDIES, v.44, no.8, pp.853 - 860

ISSN
0047-2506
DOI
10.1057/jibs.2013.35
URI
http://hdl.handle.net/10203/190585
Appears in Collection
MT-Journal Papers(저널논문)
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