Productivity e¤ects of foreign acquisitions in Swedish manufacturing: The FDI productivity issue revisited

This study investigates how foreign acquisitions a¤ect productivity in Swedish manufac-turing rms. In order to isolate the causal e¤ects due to a takeover we use a propensity score matching estimator to compare similar treated and untreated \u85rms. We then apply the di¤erence-in-di¤erence estimator and show that there is a positive e¤ect on productivity due to foreign acquisition. Foreign acquisitions increases the productivity in Swedish \u85rms, resulting in adi¤erence by between 3 and 9 percent depending on the estimator choosen and whether the \u85rms are matched or not. Moreover, this productivity di¤erence does not occur immediately but starts three years post acquisition. JEL Classi\u85cation: F23, J3