Employee productivity, employment growth and the cross-border acquisitions by emerging market firms

We examine the impact of the cross-border acquisitions made by firms from emerging markets on employee productivity and employment growth. The recent literature suggests that cross-border acquisitions enable emerging market firms to obtain new skills and knowledge-intensive assets, which, in turn, may lead to an increase in productivity. However, our empirical analysis suggests that cross-border acquisitions reduce employee productivity and have a limited impact on employment growth. Moreover, the adverse effect on productivity is associated with the cross-border acquisitions in less-developed countries and countries with considerably different national cultures. Overall, our findings cast doubt on the idea that cross-border acquisitions enable emerging market firms to improve the productivity of one of their most important resources, namely, their human capital.