This paper contributes to the ongoing debate on the welfare effects of foreign direct investment by investigating the … selection bias, it is found that foreign takeovers have a large negative impact on the propensity to perform innovation … share of sales from product innovations is not significantly affected by a foreign takeover for a given amount of innovation …

The innovation activities of foreign subsidiaries have been identified as an important source of competitive advantage … localized expertise. To achieve this foreign subsidiaries have to overcome cultural and social barriers (liability of … innovation activities in Germany from various sectors. We find that foreign-controlled firms are not challenged by liability of …