Title: Foreign ownership and the pursuit of global technological arbitrage opportunities

Authors: Sergey Alexander Anokhin; Vladislav V. Spitsin; Andrei Y. Trifonov; Irina S. Antonova

Addresses: College of Business, University of Louisville, Louisville, KY 40292, USA ' National Research Tomsk Polytechnic University, Tomsk, Russia; Tomsk State University of Control Systems and Radioelectronics, Tomsk, Russia ' National Research Tomsk Polytechnic University, Tomsk, Russia ' National Research Tomsk Polytechnic University, Tomsk, Russia

Abstract: In industries characterised by low intra-industry arbitrage opportunities, firms may extract entrepreneurial rents and ensure profitability by sourcing technological arbitrage opportunities across national borders. Foreign owners provide access to such opportunities. In the setting of 1073 Russian companies operating in the industrial machinery manufacturing industry over the course of 2013-2016, we present initial evidence suggesting that partial foreign ownership may avail international arbitrage opportunities to the firms, resulting in superior performance. The effect of arbitrage opportunities on firm performance is strongest when firms have high financial liquidity. The optimal share of foreign investor control that maximises firm performance is estimated between 39% and 51%.

Keywords: foreign ownership; arbitrage opportunities; performance; panel data.

DOI: 10.1504/EJIM.2025.143272

European Journal of International Management, 2025 Vol.25 No.1, pp.37 - 56

Received: 29 Jul 2019
Accepted: 16 Feb 2020
Published online: 12 Dec 2024 *

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