ABSTRACT This study employs firm‐level data to investigate the causal effects of foreign acquisitions on both real economic outcomes and financial performance metrics of target firms. To address potential selection bias arising from the non‐random acquisition patterns of domestic enterprises by foreign investors—a process characterized by the systematic targeting of high‐performing local firms by international entities—we employ advanced econometric methods designed to account for heterogeneous treatment effects. Furthermore, a comparative analysis between foreign and domestic acquisitions is conducted to isolate the specific effects attributable to foreign ownership, distinct from general acquisition dynamics. Empirical findings from comprehensive data on Indian firms demonstrate that foreign acquisitions yield substantial financial improvements but do not confer significant productivity advantages relative to domestic acquisitions.

The accelerated growth of the electric vehicle (EV) market has significantly increased the demand for lithium-ion batteries (LIBs), exposing critical vulnerabilities in the global supply chain. These vulnerabilities stem from bottlenecks at various stages, including raw material extraction, processing, and manufacturing. Despite the broad geographic distribution of critical raw materials such as lithium, nickel, cobalt, and manganese, previous studies have shown that China dominates nearly all supply chain segments, raising concerns about supply chain vulnerabilities and geopolitical dependencies [1,2].In light of China's potential plans to impose restrictions on the export of manufacturing technologies, it has become essential, particularly for Europe and North America, to address these challenges and establish a sustainable and autonomous value chain. This objective can be achieved by enhancing the comprehension of supply chain control, a subject explored in this study through a comprehensive analysis of capital ownership shares across the respective regions [3]. By reassessing the ownership of key supply chain stakeholders based on their headquarters' locations, the findings reveal that China holds dominant stakes in 11 out of 12 key segments, further strengthening its position through foreign acquisitions (Fig. 1). The only exception to this is manganese mining, where Australian, South African, and European companies hold the largest shares. Although the United States of America (USA) and Europe are actively securing stakes in lithium, nickel, and cobalt mining, China remains the undisputed leader in downstream production, particularly in lithium iron phosphate (LFP) cathode manufacturing, where it controls over 98% of the market.These findings suggest a need for continuous adaptation of trade policies, critical materials legislation, and strategic investments to mitigate dependencies on China. One possible approach includes the transition towards nickel manganese cobalt (NMC)-based LIBs, though LFP’s cost advantages present a complex challenge to this shift. Another strategy identified in this study is the expansion of refining and production capacities outside China. A coordinated effort between the USA and Europe could significantly reduce reliance on China, fostering a more resilient and sustainable global LIB supply chain.

This paper examines the processes of cross-cultural adaptation and internationalization within the Slovak hospitality industry, exploring how hotel businesses expand beyond national borders while responding to diverse cultural contexts. The study integrates qualitative and quantitative approaches, combining case studies, comparative analysis, and statistical evaluation to provide a multidimensional understanding of cultural and managerial factors shaping international growth. Particular attention is given to entry strategies such as franchising, joint ventures, strategic alliances, and direct ownership, and how cultural compatibility, local traditions, and consumer behavior in target markets influence these. Findings reveal that Slovak hotel companies adopting culturally adaptive and network-based internationalization models achieve stronger brand acceptance, more resilient growth, and long-term sustainability compared with firms relying on standardized strategies. Empirical results confirm that sensitivity to cultural norms, investment in intercultural communication, and collaboration with local partners enhance the success of international expansion. Moreover, foreign acquisitions yield higher benefits than domestic growth, particularly in customer loyalty and service innovation. The paper highlights digitalization, sustainability, and cultural intelligence as critical drivers of competitiveness, while also recognizing barriers such as regulatory complexity and cultural distance. By linking the Uppsala and network models of internationalization with cross-cultural management theory, this research contributes to both the academic and practical understanding of how culture influences global expansion in hospitality.

Many studies show that the employees of foreign-owned firms earn higher wages on average than their otherwise similar counterparts in domestic firms. This paper contributes to the strand of literature that compares the differences in the wage gains related to foreign acquisitions, dependent on the country of origin of the foreign direct investments (FDI). The analysis is based on Estonian matched employer-employee data for the years 2006 to 2018. Impulses from Northern and Western European FDI are compared with FDI from the rest of the World. An acquisition by a foreign firm is considered a treatment. Employees who work for four consecutive years in these firms are matched with similar counterparts based on their wages before acquisition and in terms of individual characteristics and the labour productivity of firms. We estimate the effect of foreign acquisition using difference-in-differences with matching methods based on the estimated propensity score. Firm-level effects are positive. At the worker level, we find that the average treatment effect on treated individuals is not statistically significant in firms where the new owners came from Northern and Western Europe (NWE). At the same time, acquisitions by firms from other countries (OTR) indicated a large effect on stayers. Workers in the NWE group already have rather high wages prior the acquisition and workers in the OTR group may profit from the acquisition mainly because of the phenomenon known as cherries-for-sale.

Foreign-acquired firms pay higher wages. The wage gap may arise with worker composition (e.g., sorting of high-quality workers) or firm-level premia (e.g., productivity improvements). We propose a dynamic decomposition on The Netherlands’ universal employer–employee data to understand the drivers of the post-acquisition wage gap. The wage gap rises from 1% to 5% after the acquisition, and firm level premia account for roughly three-quarters of the gap. The contribution of the workforce composition is initially absent, but grows to one-fifth of the wage gap, driven solely by new hires. Firm-level premia associate with higher management pay, worker training, and firms’ internationalization strategies. We show how the implied relative importance of worker sorting and firm-level development varies with assumptions on the counterfactual of the acquisition.

ABSTRACT The lack of consensus in academic research on the environmental effects of foreign ownership prompts us to re‐examine this issue. Using 3847 foreign acquisition cases in China from 1998 to 2013, we employ the PSM‐DID method to investigate the impact of foreign acquisitions on the pollution emissions of acquired plants. Our findings reveal an increase in sulphur dioxide (SO 2 ) emissions for acquired plants, a result that remains consistent when considering SO 2 emission intensity. We attribute this finding primarily to pollution offshoring: following foreign acquisitions, target plants shift their operations towards exporting intermediate goods, particularly pollution‐intensive ones. To support this shift, acquired plants tend to reduce R&D investments and expand production capacity by adding more production lines, which realigns their production structure towards pollution‐intensive industries. Consequently, the acquired plants are unlikely to gain positive environmental spillovers from the acquisition. Finally, we also evaluate the economic performance of the acquired plants and the impact of foreign divestment, finding that foreign investment primarily benefits the host country through financial channels rather than (green) technological channels.

ABSTRACT While attracting foreign direct investments (FDI) has been at the core of the economic policy of many countries since the 1980s, existing evidence of a causal foreign ownership effect on firm-level productivity is mixed. This paper revisits the productivity effect of foreign takeovers on domestic firms. Leveraging administrative firm-level data from Estonia, Latvia, and Norway, we shed some light on the following key questions: 1) “Does the magnitude of the effect of foreign ownership depend on the host country’s level of development?;” 2) “Does spatial, cultural, and economic proximity between the sending and receiving countries play a role in the foreign ownership effect?;” and 3) “To what extent are these effects heterogeneous across industries?” By implementing a propensity score matching procedure, combined with a difference-in-differences approach, our results indicate that the productivity effect of foreign ownership greatly varies across host countries, sectors and FDI’s region of origin. We document an overall positive but heterogeneous effect of foreign acquisitions on domestic firms, with a stronger productivity boost in Estonia and Latvia than in Norway. The effects in each country are concentrated on FDI from particular regions and specific economic sectors. These results suggest that the positive effect of FDI on receiving companies is conditional on both the characteristics of the investor and the acquisition target.

ABSTRACTThe paper studies how geopolitics plays a role in China's outward foreign direct investment (FDI) decisions. The more specific focus is on the European Union (EU). The community has recently introduced a screening framework to prevent that foreign acquisitions of assets, especially involving key technologies and strategic sectors, jeopardise the functioning of the internal market. Based on the empirical analysis applied to a panel of 14 EU sectors observed over the period 2005–2022, the estimation results confirm that purely economic reasoning behind China's outward FDI in the EU plays only a limited role. Instead, China is likely to pursue foreign investment strategies that are closely related to the achievement of important geopolitical goals. This brings about important economic policy implications, which are discussed in the paper.

The 2017 Tax Cuts and Jobs Act (TCJA) slashed corporate tax rates on equity-financed investments while raising them sharply on debt-financed investment. This study examines the tax reforms impact on the volume and composition of U.S. inbound foreign investment during 2014-2019 using regression analysis of bilateral effective average and marginal tax rates. We find that TCJA affected inbound investment, especially incre-mental investment by existing foreign-owned companies: Retained earnings rose due to lower equity tax rates, while expansions and tangible investments responded to both equity and debt tax changes. Foreign acquisitions and new establishments were not significantly impacted, and industry-level analysis shows an attenuated effect of effective tax rates. We also find that bilateral cross-border tax rates with the country of ultimate beneficial ownership correlate more strongly with investment than bilateral rates with intermediate jurisdictions.

From Local to Global: How Foreign Acquisitions Reshape Jobmobility

Through a number of legislative reforms, most notably the Foreign Acquisitions and Takeovers Act of 1975 and its ensuing revisions, Australia's foreign investment policy has changed. The goal of the approach is to preserve national security while luring in international investment. The Foreign Investment Review Board (FIRB), which assesses foreign investments using a "national interest test," is a crucial component of this structure. With an emphasis on Chinese investments, this article investigates how these policies have affected state-owned businesses in particular. It examines potential changes to Australia's foreign investment laws in the future and draws attention to the difficulties presented by the FIRB review procedure.

This study examines how positive beliefs about organizational changes during a foreign acquisition case influence organizational identification, perceptions of ethical organizational culture, and individual performance seven months post-acquisition. By integrating theories of social identity and organizational change, we offer a new perspective on how positive perceptions of change influence key outcomes following mergers and acquisitions (M&As). Using a cross-lagged design with two cross-sectional datasets within a high-intensity telecommuting organization in Romania, we found that viewing change positively significantly enhanced organizational identification, perceptions of ethical organizational culture, and individual performance. These findings highlight the crucial role of effectively managing the narrative surrounding change processes and enhancing employee perceptions in successful organizational integration following M&As.

This study investigates the dual impacts of foreign acquisition and public listing on the performance of Vietnamese commercial banks.Using a panel dataset of 25 banks from 2012-2022 and employing the Generalized Method of Moments (GMM), we find that foreign acquisition positively influences bank profitability (coefficient = 0.183, p < 0.01), while public listing has a positive but weaker impact (coefficient = 0.0428, p < 0.05).There is a relatively different influence between large banks and small banks.Liquidity and economic growth positively affect performance, while inflation boosts revenue and profit at moderate levels.This study contributes to the literature by examining the combined effects of foreign acquisition and public listing in an emerging market context, extending agency theory and the resource-based view to Vietnamese banking.Our findings have implications for bank managers and policymakers in managing international partnerships and capital market activities.

Do foreign acquisitions improve target firms’ green innovation performance?

This paper covers the trend of cross-border mergers and acquisitions (M&amp;As) of corporate control in Italy. The expansion of international acquisitions in the last decades changed the corporate structure of industries and business organizations. The common understanding regards the suspicious transfer of control of companies to a foreign owner. However, the reasons seem ungrounded, and the evidence is conflicting. This paper aims to disentangle this view and offer a more objective assessment. The research uses a dataset comprised of 446 cross-border deals of foreign companies targeting Italian business enterprises over the period 2005–2015 and their performance over the period 2013–2022. The case of Italy is of interest because of the number of foreign acquisitions in the years that comprised the great financial crisis (2007–2008) and the sovereign debt crisis (2010–2011). Foreigners’ takeover of Italian companies followed multiple strategies and produced international synergies. The article concludes with implications and considerations for further research.

Short and medium-term effects of foreign acquisitions on manufacturing firms: Evidence from Germany

Abstract This paper examines whether gender diversity influences foreign merger and acquisition (M&amp;A) premiums and outcomes in China. Consistent with agency and resource dependence theories, we find that female directors significantly reduce the acquisition premium paid for foreign targets. We show that the market responds positively in the short‐term (measured by cumulative abnormal returns) to the announcement of foreign acquisitions by firms with greater female representation in the boardroom. We further find significant evidence that acquirers' boards comprising more female directors experience value creation and better operating synergies (measured by buy‐and‐hold abnormal returns and changes in return on assets) in the long‐term following engagement in foreign M&amp;A deals. Interestingly, after distinguishing between female independent and executive directors, we find that our previous finding on board gender diversity can be attributable to both the monitoring (independent directors) and supervisory (executive directors) roles played by female directors. We also find evidence accords with the argument of the critical mass of female directors' representation in the boardroom. Our results are robust after controlling for endogeneity issues using instrumental variables (IV), propensity score matching (PSM), Heckman, and firm fixed‐effects methods. Overall, our findings offer additional empirical support for the global concern by regulators for improving corporate governance practices by increasing female quotas in the boardroom.

Abstract We investigate the causal relationship between foreign ownership and international trade performance by comparing foreign‐acquired firms with similar domestic‐acquired firms in China with regard to changes in their post‐acquisition international trade performance. Our findings indicate that foreign ownership significantly enhanced the probability of both exporting and importing, and strongly increased trade value. Foreign ownership took effect from the year of the acquisition and persisted for at least 2 years. It stimulated both processing trade and ordinary trade, and expanded products and trading partners. Post‐acquisition trade performance also exhibited heterogeneity based on the different pre‐acquisition and post‐acquisition ownership. As for the underlying mechanisms, we show that firms experienced significant output expansion, increased export dependence, and eased financial constraints after foreign acquisition.

The 2017 US tax legislation—widely referred to as the Tax Cut and Jobs Act (TCJA)—fundamentally transformed the US system of international taxation. It ostensibly ended worldwide taxation but introduced, for instance, a new tax on “Global Intangible Low-Taxed Income”. This paper surveys the emerging empirical literature on the impact of the TCJA’s international provisions. It documents five robust findings in this empirical literature. First, the TCJA led to a general decline in US MNCs’ foreign acquisitions. Second, the TCJA increased US MNCs’ investment in routine foreign tangible assets. Third, the reform did not lead to any change in profit shifting by US MNCs beyond the magnitude that would be expected based on the TCJA’s tax rate reduction. Fourth, The TCJA appears to have reduced the market value of US MNCs relative to domestic US firms. Fifth, the TCJA does not appear to have had any detectable impact on domestic US investment and wages (although there are some contrary results for capital expenditures). The welfare implications of these findings depend crucially on whether US MNCs’ are viewed as having engaged in too much or too little foreign activity prior to the TCJA. This depends on the choice of theoretical framework and the relevant normative benchmark, and cannot readily be resolved empirically.

Shocks to Firm Organization – The Case of Foreign Acquisitions