Foreign Ownership and Corporate Restructuring: Direct Investment by Emerging-Market Firms in the United States

This paper examines the recent upsurge in foreign direct investment by emerging-market firms into the United States. Traditionally, direct investment flowed from developed to developing countries, bringing with it superior technology, organizational capital, and access to international capital markets, yet increasingly there is a trend towards Òcapital flowing uphillÓ with emerging market investors acquiring a broad range of assets in developed countries. Using transaction-specific information and firm-level accounting data we evaluate the operating performance of publicly traded U.S. firms that have been acquired by firms from emerging markets over the period 1980-2007. Our empirical methodology uses a difference-in-differences approach combined with propensity score matching to create an appropriate control group of non-acquired firms. The results suggest that emerging country acquirers tend to choose U.S. targets that are larger in size (measured as sales, total assets and employment), relative to matched non-acquired U.S. firms before the acquisition year. In the years following the acquisition, sales and employment decline while profitability rises, suggesting significant restructuring of the target firms.foreign direct investment, capital flows, emerging markets, acquisitions, firm performance

Foreign Ownership and Firm Performance: Emerging-Market Acquisitions in the United States

This paper examines the recent upsurge in foreign acquisitions of U.S. firms, specifically focusing on acquisitions made by firms located in emerging markets. Neoclassical theory predicts that, on net, capital should flow from countries that are capital-abundant to countries that are capital-scarce. Yet increasingly emerging market firms are acquiring assets in developed countries. Using transaction-specific acquisition data and firm-level accounting data we evaluate the post-acquisition performance of publicly traded U.S. firms that have been acquired by firms from emerging markets over the period 1980-2007. Our empirical methodology uses a difference-in-differences approach combined with propensity score matching to create an appropriate control group of non-acquired firms. The results suggest that emerging country acquirers tend to choose U.S. targets that are larger in size (measured as sales, total assets and employment), relative to matched non-acquired U.S. firms before the acquisition year. In the years following the acquisition, sales and employment decline while profitability rises, suggesting significant restructuring of the target firms.fdi, foreign direct investment,

“Follow your heart” – Chinese urban post-80 mothers’ expectations for their children

It has been 35 years since the Chinese government first introduced the One-Child Policy in 1978 to control the rapidly growing population. The first generation born after the policy was instated are mainly only children and are usually referred to as the post-80 generation. As they are stepping into their thirties and becoming parents, the current project explores their expectations for their children, with a focus on urban post-80 mothers\u27 expectations for their children\u27s freedom of choice and how these expectations are different from those of the previous generations. A telephone survey was conducted with 82 urban mothers from four major cities in China. Results showed that the urban singleton mothers—mothers who are only children themselves—expected in general more freedom of choice for their children; the post-80 mothers in general were more satisfied with the freedom of choice they had in their childhood than pre-80 mothers. These results suggested that despite various critiques, the One-Child Policy might have increased Chinese urban mothers’ expectations for their children’s freedom of choice