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on Technology and Industrial Dynamics |
| By: | Katariina Nilsson Hakkala; Bertrand; Norbäck Olivier; Persson Pehr-Johan; Lars |
| Abstract: | We analyze how the entry mode of Foreign Direct Investments (FDI) affects affiliate R&D activities. Using unique affiliate level data for Swedish multinational firms, we first present empirical evidence that acquired affiliates have a higher level of R&D intensity than Greenfield (start-up) affiliates. This gap persists over time and with the age of the affiliates, as well as for different firm types and industries. To explain this finding, we develop an acquisitioninvestment-oligopoly model where we show that for a foreign acquisition to take place in equilibrium, the acquiring MNE must invest sufficiently in sequential R&D in the affiliate. Otherwise, rivals will expand their business, thus making the acquisition unprofitable. Two additional predictions of the model ? that foreign firms acquire high-quality domestic firms and that the gap in R&D between acquired and greenfield affiliates decreases in acquisition transaction costs ? are consistent with the data. JEL classification: F23, L10, L20, O30 |
| Keywords: | FDI, M&A, R&D, Multinational Firms |
| Date: | 2008–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:fer:dpaper:459&r=tid |
| By: | Carina Hirsch; Giovanni Sulis |
| Abstract: | This paper analyses the growth effects of high levels of human capital at the industry level. By favouring technology adoption, human-capital-intensive industries grow faster compared to less human-capital-intensive industries in economies that have higher levels of human capital. Using data for nine macro sectors of manufacturing industries in the twenty Italian regions, the results show positive and significant effects of human capital levels and accumulation on value added growth. This result is robust to a series of sensitivity checks such as measures of productivity growth and different indicators of human capital. This finding is particularly important for Italy, as it has always had a model of industrial specialization focused on the traditional sectors which have a low content of technology and human capital. |
| Keywords: | Growth, Human Capital, Technology Adoption, Regions, Sectors, Italy. |
| JEL: | O47 R11 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200821&r=tid |