Innovation and Foreign Ownership

Maria Guadalupe (), Olga Kuzmina and Catherine Thomas

No 16573, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses a rich panel dataset of Spanish manufacturing firms (1990-2006) and a propensity score reweighting estimator to show that multinational firms acquire the most productive domestic firms, which, on acquisition, conduct more product and process innovation (simultaneously adopting new machines and organizational practices) and adopt foreign technologies, leading to higher productivity. We propose a model of endogenous selection and innovation in heterogeneous firms that jointly explains the observed selection process and the innovation decisions. Further, we show in the data that innovation on acquisition is associated with the increased market scale provided by the parent firm.

JEL-codes: D21 F23 O31 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-ifn, nep-ino and nep-tid
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Citations: View citations in EconPapers (8)

Published as Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2012. "Innovation and Foreign Ownership," American Economic Review, American Economic Association, vol. 102(7), pages 3594-3627, December.

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Journal Article: Innovation and Foreign Ownership (2012)
Working Paper: Innovation and Foreign Ownership (2010)
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