Employment effects of foreign acquisition

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

“…In contrast to services, it appears that larger firms in manufacturing are acquired at a decreasing rate. These results are in line with Gioia and Thomsen (2004) for Denmark and with findings of Bandick and Görg (2010) and Bandick and Karpaty (2011) for Sweden. We find that foreign investors "cherry picked" higher productivity service firms in Belgium and Denmark, while in Austria lower productivity services firms were more likely to be acquired by foreign investors (in contrast to findings by Bellak, Pfaffermayr and Wild, 2006).…”

“…On the other hand, Bandick and Hansson (2009) found that in Sweden, the relative demand for skilled labour rose in foreign-acquired non-multinational firms (but not in acquired multinational firms). Also Bandick and Karpaty (2011) found an increase in skilled employment in Sweden following foreign acquisitions. Girma and Görg (2004) found slower employment growth in the UK electronics industry, in particular for unskilled labour, but no significant effects in the food sector.…”

“…Faster employment growth after acquisition is found by Piscitello and Rabbiosi (2005) for Italy, Gong, Görg and Maioli (2007) for privatised Chinese firms, Almeida (2007) for Portugal, Arnold and Javorcik (2009) as well as Lipsey, Sjöholm and Sun (2010) for Indonesia, Balsvik and Haller (2010) for Norway, and Bandick and Görg (2010) as well as Bandick and Karpaty (2011) for Sweden. Negative employment effects have been found by, among others, Conyon et al (2002a) for the UK, Csengödi, Jungnickel and Urban (2008) for Hungary, and Chari, Chen and Dominguez (2009) for the United States.…”

“…(See e.g. Bandick and Hansson, 2009;and Bandick and Karpaty, 2011.) Lehto and Böckerman (2008) hypothesise that especially in non-labour-intensive services a domestic buyer -located in the same market as the target firm -may have a greater interest than a foreign owned firm to buy another firm to limit competition.…”

Ownership Change and its Implications for the Match between the Plant and its Workers.

“…In this setting, a reduction in trade costs will increase the returns to screening for exporting firms and therefore 3 Negative employment effects of acquisitions are found for the UK by Conyon et al (2002) and Hijzen et al (2013), and Lichtenberg and Siegel (1990) find that takeovers in the US are followed by a reduction in administrative overhead by cutting head-office employment. No significant change in employment levels following foreign acquisitions are found for Brazil and Germany (Hijzen et al, 2013), while positive effects are found for Sweden (Bandick and Karpathy, 2011), Portugal and Indonesia (Hijzen et al, 2013). 4 Csengödi et al (2008) find an increase in the share of highly educated workers after foreign acquisition in a panel of Hungarian manufacturing firms, Huttunen (2007) finds a reduction in the high-skill share in a panel of Finnish establishments, while Almeida (2007) finds no changes in the level of education following foreign acquisitions in Portugal.…”