| Abstract: |
Chinese acquisitions of Western firms have become central to debates over
technology transfer, national security, and investment screening.
Understanding their economic consequences requires evidence on how acquired
firms perform and reorganize under Chinese ownership. Using linked Swedish
firm and worker registers for 1997–2021 and a matched, stacked
difference-in-differences design, we examine majority acquisitions by Chinese
and other foreign owners. Other foreign acquisitions raise labor productivity
by about 6 percent and employment by about 14 percent on average, alongside
increases in total factor productivity, workforce skills, and trade intensity.
They also reshape management, strengthen trade links with the acquirer’s home
country, and increase workers’ mobility to multinational enterprises. For
Chinese acquisitions, we find no statistically detectable improvements in firm
performance or comparable evidence of management restructuring, worker
mobility, or trade integration. Chinese acquisitions are also rare in
industries classified as security-sensitive. These findings provide a detailed
account of the economic footprint of Chinese ownership in an advanced host
economy. The pattern is consistent with acquisitions seeking assets valuable
to the parent group rather than gains through restructuring the target. |