The Effect of Foreign Acquisition on Firm-Level Productivity: A Literature Survey

Abstract

One important aspect of globalization is the crossborder flow of capital, namely foreign direct investment that is considered to be an important engine of economic growth via productivity enhancement. One important form of foreign direct investment is crossborder mergers and acquisitions (M&As). The effect of M&As on firmlevel productivity has been analyzed in many papers. This article provides a survey of this literature following a kind of evolutionary perspective: The main results are presented following advances in data usage and methodology. Further research questions are also formulated. JEL code: F21, F43