Acquisition FDI and the Export Intensity of Multinational Firms

Abstract

This paper investigates the impact of acquisition FDI on exporting intensity in UK manufacturing. A quasi-likelihood estimation method is used, and the empirical estimates point to the following conclusions: (i) UK firms with higher exporting intensity are more likely to be foreign takeover targets; (ii) US acquired firms increase their exporting intensity, consistent with the idea that acquisition FDI is used as a platform for serving the wider EU market (iii) Firms acquired by European multinationals significantly decrease their export-orientation, suggesting targeting of the domestic market post-takeover; (iv) The exporting propensity of non-US and non-EU multinationals exhibits no significant change.

Keywords: Foreign Direct Investment, acquisitons, exports

JEL Classification: F14, F23