Foreign buyers boost skills at small acquired firms, study finds
A Swedish study challenges fears that foreign acquisitions hollow out domestic R&D and workforce quality. Researchers found foreign companies actually tend to buy productive, skill-intensive small firms—and then upgrade their workforces further, especially in services. The finding matters because 90% of acquired firms employ fewer than 50 people, a group previously overlooked in acquisition research.
Originaltitel: Effects of foreign acquisitions on R&D and high-skill activities
<p>Using Swedish microdata, we find no evidence for the concerns circulating in the public debate that foreign acquisitions lead to reductions in both R&D expenditures and high-skilled activities in targeted domestic firms for either MNEs or non-MNEs. Previous studies have only focused on larger firms. In this paper, we are able to study the impact on smaller firms (fewer than 50 employees), which is important because 90% of the firms acquired meet this criterion. For this group of firms, there is no information on R&D, but by using the register of educational attainment, we obtain data on the share of high skilled labor in all Swedish firms irrespective of size. Interestingly, we find that among smaller firms, foreign enterprises tend to acquire high-productive, skill-intensive firms (cherry-picking). After the acquisitions, skill upgrading appears in acquired smaller, non-MNE firms, particularly in the service sector. </p>