Does Multinationality Matter? Evidence from Swedish firm data
AbstractThis paper highlights the importance of R&D, domestic multinationals and the distinction between greenfield and acquisition FDI with respect to productivity. The analysis is performed using a panel of firm data covering the entire Swedish manufacturing sector in the 1990’s. The analysis shows that, other things equal, foreign-owned firms have higher total factor productivity than domestic firms. The stock of firm-specific knowledge, measured by R&D, also emerges as important. Consistent with Dunning’s ownership-location-internalization (OLI) paradigm, the results suggest that there is no productivity differential between Swedish and foreign MNEs. So multinationality per se is more important than being foreign. Furthermore, it is shown that the mode of entry matters. Foreign greenfields in Sweden are more productive compared to both acquired firms and Swedish MNEs. Finally there is no evidence for reverse causality.
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Bibliographic InfoArticle provided by Duncker & Humblot, Berlin in its journal Applied Economics Quarterly.
Volume (Year): 52 (2006)
Issue (Month): 2 ()
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Web page: http://www.duncker-humblot.de
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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- Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers 23, Institute for the Study of Labor (IZA).
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