The literature has postulated that foreign capital participation (through mergers and acquisitions) is associated with more advanced technologies being injected into the acquired targets, and thus it might be reasonable to assume that foreign acquisitions would generate larger effects than domestic acquisitions to the acquired targets. This paper contributes to the discussion by examining the effects of foreign acquisitions versus domestic acquisitions on plant survival to both born-domestic and born-foreign plants. Using 26 cohorts of plants born in Canada between 1973 and 1998, the paper finds that both foreign acquisitions and domestic acquisitions significantly increase life durations of born-domestic plants, although domestic acquisitions generate larger effects. For born-foreign plants, neither foreign acquisitions nor domestic acquisitions significantly change their life span.

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International Journal of the Economics of Business
Norman Paterson School of International Affairs

Wang, Y. (2013). Foreign Acquisition, Domestic Acquisition and Plant Survival. International Journal of the Economics of Business, 20(3), 307–324. doi:10.1080/13571516.2013.835974