Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81301
Authors: 
Bertrand, Olivier
Hakkala, Katariina
Norbäck, Pehr-Johan
Year of Publication: 
2007
Series/Report no.: 
IFN Working Paper 693
Abstract: 
This paper investigates how the entry mode of foreign direct investment (FDI) affects the affiliate R&D activities using unique data on Swedish multinational firms over a long period of time (1970 to 1998). On average, acquired affiliates are more likely to do R&D and have a higher level of R&D intensity than affiliates created by greenfield entry. This difference in observed R&D is explained by differences in parent, affiliate, industry and country characteristics as well as by different reactions to these characteristics, as predicted by the recent theoretical literature on international mergers and acquisitions (M&As). The results also suggest that M&As are, to a larger extent, motivated by asset-seeking motives than greenfield entry, especially in the 1990s.
Subjects: 
FDI
M&A
Greenfield Investment
R&D
Multinational Firm
JEL: 
F23
L10
L20
O30
Document Type: 
Working Paper

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