The Impact of Foreign Takeovers and FDI on Export and Import Performance in Argentina

DANIEL CHUDNOVSKY, ANDRÉS LÓPEZ, EUGENIA ORLICKI

Bahía Blanca, Argentina

Congreso; XLII Reunión Anual de la Asociación Argentina de Economía Política; 2007

This paper provides evidence on the impact of foreign takeovers of domestic firms on trade (exports, imports, export intensity and import intensity) over a period of FDI boom in Argentina (1992-2001). Our evidence supports that exports and exports propensities (i.e. exports/sales ratio) increase after the firm changed ownership. The results are similar in the case of imports and imports propensities. We show that theses findings are robust across different specifications, estimation methods and alternative samples. Furthermore, an attempt to estimate horizontal and backward export spillovers is made. Results on the indirect effects of the foreign presence are less encouraging, since we do find evidence neither of horizontal nor of backward spillovers from FDI on the exports of domestic firms