The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter?

The growth of new technology-based firms (NTBFs) is usually restricted by their limited ownership and management structures. This paper explores whether acquisition, particularly that by multinational enterprises (MNEs), promotes the growth of NTBFs. Based on Swedish micro-level longitudinal data, this study further distinguishes between Swedish MNEs and foreign MNEs as acquirers and disentangles their different acquisition effects on the growth of NTBFs. Based on a large sample of Swedish NTBFs entering from 1997 to 2002 and being followed until 2009, this paper uses fixed-effects model combined with inverse-probability-of-treatment weights to account for endogeneity of acquisition arising from both time-invariant and time-varying heterogeneity across firms. The findings show that acquisition by Swedish MNEs significantly improves the growth of NTBFs, but only when it comes to the growth in employees. In contrast, acquisition by both foreign MNEs and Swedish domestic enterprises is not found to have any significant effects on the growth in either employees or sales of NTBFs.