Effects of Foreign Acquisitions on R&D and High-skill Activities

November 27, 2015

In the late 1990s, foreign ownership grew quite dramatically in the Swedish business sector, and some flagship Swedish multinational enterprises (MNEs), such as Volvo Cars and Astra, were acquired by foreign enterprises. This development raised concerns in the public debate for what would happen to R&D and other high-skilled activities in Sweden. This report studied the impact of foreign acquisitions on both smaller and larger firms in Sweden, finding no evidence that foreign acquisitions lead to reductions in R&D expenditures and high-skilled activities in targeted domestic firms.