Productivity Enhancement at Home via Cross-Border Acquisitions: The Roles of Learning and Contemporaneous Domestic Investments

Forthcoming in Strategic Management Journal

INSEAD Working Paper No. 2014/18/STR

42 Pages Posted: 6 Mar 2014

See all articles by Olivier Bertrand

Olivier Bertrand

SKEMA Business School - Sophia Antipolis Campus

Laurence Capron

INSEAD - Strategy

Date Written: March 5, 2014

Abstract

We examine whether ex post domestic productivity gains accrue to firms making crossborder acquisitions. We argue that cross-border acquisitions can enhance the acquirers’ productivity at home, and we posit that these domestic productivity gains will be greater when there are learning opportunities in the target’s host country and when contemporaneous domestic productivity-enhancing investments are made by the acquirer in conjunction with the acquisition. These predictions are supported by data drawn from a sample of French acquiring and non-acquiring firms. Our results indicate that cross-border acquisitions and investing in productivity at home are complementary: each makes the other more beneficial to firm productivity.

Keywords: Cross-border Acquisitions, FDI, Resource Redeployment, Productivity

Suggested Citation

Bertrand, Olivier and Capron, Laurence, Productivity Enhancement at Home via Cross-Border Acquisitions: The Roles of Learning and Contemporaneous Domestic Investments (March 5, 2014). Forthcoming in Strategic Management Journal; INSEAD Working Paper No. 2014/18/STR. Available at SSRN: https://ssrn.com/abstract=2404840 or http://dx.doi.org/10.2139/ssrn.2404840

Olivier Bertrand

SKEMA Business School - Sophia Antipolis Campus ( email )

60 rue Dostoïevski
Sophia Antipolis, 06902
France

Laurence Capron (Contact Author)

INSEAD - Strategy ( email )

Boulevard de Constance
77305 Fontainebleau
France
+33 1 60 74 55 08 (Phone)

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