NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Foreign Entry into U.S. Manufacturing by Takeovers and the Creation of New Firms

Robert E. Lipsey, Zadia Feliciano

NBER Working Paper No. 9122
Issued in August 2002
NBER Program(s):   ITI

Using U.S. Bureau of Economic Analysis data for individual foreign acquisitions and new establishments in the U.S from 1988 to 1998, and aggregate data for 1980 to 1998, we find that acquisitions and establishments of new firms tend to occur in periods of high U.S. growth and take place mainly in industries in which the investing country has some comparative advantage in exporting. New establishments are largely in industries of U.S. comparative disadvantage, and the relation of U.S. comparative advantage to takeovers is also negative, but never significant. High U.S. stock prices, industry profitability, and industry growth discourage takeovers. High U.S interest rates and high investing country growth and currency values encourage takeovers. Direct investments in acquisitions and new establishments thus tend to flow in the same direction as trade. They originate in countries with comparative advantages in particular industries and flow to industries of U.S. comparative disadvantage.

download in pdf format
   (244 K)

email paper

This paper is available as PDF (244 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9122

Users who downloaded this paper also downloaded these:
Markusen and Staehler w15530 Endogenous Market Structure and Foreign Market Entry
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us