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Title: When do foreign subsidiaries outperform local firms?
Authors: Chang, S.-J. 
Chung, J.
Jungbien Moon, J.
Keywords: absorptive capacity
cross-border mergers and acquisitions (M&As)
difference-in- differences
propensity score matching
subsidiary performance
Issue Date: Oct-2013
Citation: Chang, S.-J., Chung, J., Jungbien Moon, J. (2013-10). When do foreign subsidiaries outperform local firms?. Journal of International Business Studies 44 (8) : 853-860. ScholarBank@NUS Repository.
Abstract: This study explores when foreign subsidiaries outperform comparable local firms by evaluating the performance of local firms acquired by multinationals vs continuing local firms. This comparison allows us to single out foreign ownership effects. We employ the propensity score matching method and difference-in-differences approach in order to control for the endogeneity problem inherent in multinational firms' acquisition decisions. We find strong evidence that foreign-acquired local firms outperform comparable local firms in China, especially when the foreign firm acquires local target firms with higher absorptive capacity or with modernized ownership structure.
Source Title: Journal of International Business Studies
ISSN: 00472506
DOI: 10.1057/jibs.2013.35
Appears in Collections:Staff Publications

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