Picking "Lemons" or Picking "Cherries"? Domestic and Foreign Acquisitions in Norwegian Manufacturing

We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, highwage, high-productivity plants, while new domestic owners choose average performers of above-average size. Employment, labour p...

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Bibliographic Details
Published in:The Scandinavian journal of economics 2010-06, Vol.112 (2), p.361-387
Main Authors: Balsvik, Ragnhild, Haller, Stefanie A.
Format: Article
Language:English
Subjects:
Analysis
Business ownership
D24
Economic theory
Employment
F23
Factories
Foreign investment
Foreign owned US companies
Foreign ownership
Industrial economics
Industrial management
Industrial plants
Industrial productivity
Industrial sectors
Industrial structure
J24
L10
Labor productivity
Ownership and control
Ownership change
Productivity
Social research
Studies
Target acquisitions
Wages
Wages & salaries
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Description
Summary:We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, highwage, high-productivity plants, while new domestic owners choose average performers of above-average size. Employment, labour productivity, and total factor productivity decline in domestic acquisition targets before acquisitions; only wages recover afterwards. Employment, wages and labour productivity increase after foreign acquisitions. The sample selection introduced by long-term comparisons and a focus on unique events introduces a downward bias into the results for domestic acquisitions and an upward bias for the foreign acquisitions.
ISSN:0347-0520
1467-9442
1467-9442
DOI:10.1111/j.1467-9442.2010.01606.x