Foreign entry into US manufacturing by takeovers and the creation of new firms

Using US Bureau of Economic Analysis data from 1988 to 2006, we investigate the relationship between foreign acquisitions and new foreign establishments (greenfields) and the comparative advantage of the investing country. Unlike previous studies, we analyze the value of assets acquired by foreign investors and assets in newly established foreign firms in manufacturing industries. We find foreign acquisitions are in industries in which the investing country has a comparative advantage but are not in industries of US comparative advantage or disadvantage. Foreign-owned newly established firms are in industries of investing country comparative advantage and US comparative disadvantage. © 2016 EEA.