TY - JOUR
T1 - Foreign investors, firm level productivity, and European economic integration
AU - Bailey, Warren
AU - Muradoglu, Gulnur
AU - Onay Sahin, Ceylan
AU - Phylaktis, Kate
PY - 2024/3/1
Y1 - 2024/3/1
N2 - Using a comprehensive sample of listed and unlisted firms from 34 European countries, we study firm-level manufacturing outcomes conditioned on foreign investment, country characteristics, and EU membership. Higher foreign ownership is associated with higher productivity but lower employment, particularly when the host or source country is an EU member and scores high on disclosure and investor protection, and low on corruption. We confirm our interpretation using staggered EU accession dates and industry-level external financial dependence interacted with a financial crisis. The subset of Eastern European countries appears to benefit from foreign investment and EU accession without losing jobs. Nevertheless, manufacturing outcomes associated with survey findings on public sentiment towards globalization and migration confirm the social and political costs of globalization.
AB - Using a comprehensive sample of listed and unlisted firms from 34 European countries, we study firm-level manufacturing outcomes conditioned on foreign investment, country characteristics, and EU membership. Higher foreign ownership is associated with higher productivity but lower employment, particularly when the host or source country is an EU member and scores high on disclosure and investor protection, and low on corruption. We confirm our interpretation using staggered EU accession dates and industry-level external financial dependence interacted with a financial crisis. The subset of Eastern European countries appears to benefit from foreign investment and EU accession without losing jobs. Nevertheless, manufacturing outcomes associated with survey findings on public sentiment towards globalization and migration confirm the social and political costs of globalization.
KW - Productivity
KW - employment
KW - foreign direct investments
UR - http://www.scopus.com/inward/record.url?scp=85187018379&partnerID=8YFLogxK
U2 - 10.1016/j.jcorpfin.2024.102564
DO - 10.1016/j.jcorpfin.2024.102564
M3 - Article
SN - 0929-1199
VL - 85
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
M1 - 102564
ER -