1,721,018 research outputs found
Beyond profitability: effects of acquisitions on technical efficiency in the Italian pasta industry
No full textUnlike traditional studies on the impact of ownership changes—which use either profitability measures or stock prices—this paper investigates the impact of acquisitions on acquired firms' technical efficiency. Using a panel of Italian firms in the pasta industry for the 1981–1997 period, I estimate a stochastic production frontier with exogenous factors affecting efficiency in a translog specification with non-neutral technical progress. The main result is that acquired firms experience, within the 6 years period following the acquisition, an increase in technical efficiency of the order of 10%. This result is statistically significant and proves to be robust with respect to the inclusion of size and calendar year effects as explanatory variables of firms' inefficiency. These findings contribute to the debate on the welfare gains of ownership changes by providing evidence that mergers and acquisitions lead to cost savings, due to the reduction of acquired firms' X-inefficiency
Foreign ownership and productivity: Is the direction of causality so obvious?
No full textThis paper estimates the effect of foreign ownership on productivity in a very general setting where all potential endogeneity sources are controlled for. In particular we apply the GMM-System estimator to estimate TFP for a large sample of firms located in Italy. After controlling for unobserved heterogeneity, input simultaneity and measurement errors, foreign ownership has no effect on productivity. When we also control for the simultaneity of the ownership variable we find that nationality matters since firms under US ownership tend to be more productive than firms under national ownership. Therefore we do not find widespread empirical support to the standard internalization theory of foreign direct investment. In particular, the transfer of technology seems to occur only if the difference between the recipient and the investment country is sufficiently pronounced. Our results also highlight the importance of controlling for simultaneity of the foreign ownership variable
Foreign Direct Investments in Africa: are Chinese investors different?
No full textIn light of the upsurge in Chinese investments in Africa since Deng’s ‘‘Go Global’’ policy, we study whether
the location choices of greenfield investors in Africa differ between Chinese and non-Chinese firms. We
focus on risk- and information-related factors, i.e., investment protection provided by investment agreements
and country-of-origin, industry, and internal agglomeration. We argue that Chinese firms enjoy ownership
advantages that reduce their concern for risk. Our results show that Chinese firms are less sensitive to
risk-mitigating factors compared to firms from advanced and other emerging economies. A lower reliance
on internal agglomeration emerges as their distinctive trait in internationalization. We attribute this result
to the systemic engagement of the Chinese government, which goes beyond state ownership and reduces
the ‘‘liability of foreignness’’. Chinese firms also appear more market-seeking and manufacturing-oriented,
aggressively pursuing knowledge spillovers. Contrary to common perceptions, they do not seem distinctively
resource-seeking or to pursue unstable countries
The impact of Foreign Direct Investments on the Human Development Index in Africa: a dynamic panel analysis
No full textWhile numerous studies have analyzed the relationship between Foreign Direct Investments (FDI) and economic growth, researchers have devoted very little attention to the impact of FDI on other dimensions of welfare, such as health and education. In this paper, we explore the effects of FDI on the UNDP Human Development Index (HDI) and its three components (namely income, health and education) in African countries by using dynamic models for a panel dataset of 35 countries observed in the 1991-2017 period. In doing so, we take into account the very limited cross-sectional dimension of the dataset and the ensuing pitfalls of IV/GMM-like estimators by relying on the Least Squares Dummy Variables Corrected (LSDVC) estimator (Kiviet, 1995).
The analysis shows, overall, a positive but quite weakly significant effect of FDI on the HDI. When we consider the different components of the Index, we ascertain that the positive effect is, predictably, mainly determined by the Income component, which is positively and significantly affected by FDI flows across all model specifications. Less predictably, we detect a positive, although marginally significant in just a few of our specifications, effect on the health component of the Index. The education dimension does not seem affected by FDI.
To our knowledge, this is among the first attempts to disentangle the effect of FDI on the different components of the HDI of African countries, and the first to do it by taking into account the peculiar characteristics of the dataset. Future research should be aimed at further exploring the dynamics of the individual components of the Index, analyzing the diversified effects of FDI in different industries and from different origin countries, as well as exploring the heterogeneity given by the very different FDI destinations included in the sample
Foreign direct investments in Africa: are Chinese investors different?
No full textWe study whether the determinants of greenfield FDI in Africa differ between Chinese and non-Chinese investors. By using investment-level data we focus on the differential effect of risk- and information-related factors, i.e., investment protection provided by International Investment Agreements (IIAs) and agglomeration economies both at an aggregate level and for different functions. Chinese investors appear to be less reliant on internal and country-of-origin agglomeration and on investment protection agreements than non-Chinese ones. We argue that Chinese investors are backed by the direct engagement of their State when locating in Africa so that firm co-location and IIA protection are less salient in affecting their location choices
International Investment Agreements and FDI inflows in Africa
Get PDFUsing investment-level data, we study the location choice of 8,283 greenfield investments in 44 African countries over the 2003-2017 period, focusing on the role of International Investment Agreements. We document a positive relation between the existence of these agreements and the location of FDI into African countries. This overall effect appears to be driven by investments in Services and in Construction and Electricity, while no effect appears to exist for Extraction investments
Banks and Innovation: Microeconometric Evidence on Italian Firms
No full textIn this paper we investigate the effect of local banking development on firms' innovative activities, using a rich data set on innovation for a large number of Italian firms over the 1990s. There is evidence that banking development affects the probability of process innovation, particularly for firms in high-tech sectors, in sectors more dependent upon external finance, and for firms that are small. The evidence for product innovation is much weaker and not robust. There is also some evidence that banking development reduces the cash flow sensitivity of fixed investment spending, particularly for small firms, and that it increases the probability they will engage in R&D
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