The Effects of Greenfield FDI and Cross‐Border M&As on Total Factor Productivity

28 Pages Posted: 10 Nov 2016

See all articles by Ayesha Ashraf

Ayesha Ashraf

University of the German Federal Armed Forces - Helmut Schmidt Universität

Dierk Herzer

University of the German Federal Armed Forces - Helmut Schmidt Universität

Peter Nunnenkamp

University of Kiel

Date Written: November 2016

Abstract

We examine the effects of greenfield FDI and cross‐border mergers and acquisitions (M&As) on total factor productivity (TFP) in developed and developing host countries of FDI. Using panel data for up to 123 countries over the period from 2003 to 2011, we find that greenfield FDI has no statistically significant effect on TFP, while M&As have a positive effect on TFP in the total sample. Greenfield FDI and M&As both appear to be ineffective in increasing TFP in the subsample of developing countries. In contrast, M&As have a strong and positive effect on TFP in the subsample of developed countries.

Suggested Citation

Ashraf, Ayesha and Herzer, Dierk and Nunnenkamp, Peter, The Effects of Greenfield FDI and Cross‐Border M&As on Total Factor Productivity (November 2016). The World Economy, Vol. 39, Issue 11, pp. 1728-1755, 2016. Available at SSRN: https://ssrn.com/abstract=2867192 or http://dx.doi.org/10.1111/twec.12321

Ayesha Ashraf (Contact Author)

University of the German Federal Armed Forces - Helmut Schmidt Universität

Holstenhofweg 85
Hamburg, 22008
Germany

Dierk Herzer

University of the German Federal Armed Forces - Helmut Schmidt Universität ( email )

Holstenhofweg 85
Hamburg, 22008
Germany

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

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