The impact of foreign ownership on firms: a systematic literature review

Abstract Over the past three decades, the globalization of capital markets has flourished and seems unaffected amidst recent discussions around a deglobalization of the world economy. As a consequence, ownership structures of firms around the world have changed. The emergence of foreign investors as a distinct and powerful group of owners raises questions concerning the impact an increasingly diverse shareholder structure has on firms. Scholars have begun to shed light on the far-reaching consequences of foreign ownership for the organization and strategy of the firm. However, existing research on foreign ownership is scattered, partially because it stems from different disciplines. To map the state of this emerging research field, we present a systematic literature review spanning three decades. Specifically, we investigate foreign ownership’s impact on firms’ organization and strategy by identifying the most prominent themes discussed in the literature. Furthermore, we show that differentiating several types of foreign owners, and considering their origins, is crucial for understanding how their ownership influences firms. We also review the theoretical lenses dominating the research field. Based on our analyses, we develop a framework that synthesizes the state of the art and points at future research avenues to further unravel the multifold consequences of foreign ownership.