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Re-investment and the survival of foreign-owned plants

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  • Wren, Colin
  • Jones, Jonathan
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    Abstract

    Foreign-owned plants have higher conditional exit rates, and this paper tests the hypothesis that re-investment "embeds" these plants, leading to significantly longer survival time durations. A unique dataset is used for 265 plants that commenced in foreign ownership after 1985 in North East England, distinguishing between start-up ("greenfield") and acquisition plants. Survival is measured at 2000, and the paper analyses the duration to the first re-investment and to survival, allowing for selection into the multiple investment state. It finds that re-investment increases the lifetime of start-up plants, but it is insignificant once selection is controlled for, while for acquisition plants there is no difference. Grants affect selection, but not the survival of plants. The paper offers little support for re-investment as a source of plant "embeddedness".

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    Bibliographic Info

    Article provided by Elsevier in its journal Regional Science and Urban Economics.

    Volume (Year): 39 (2009)
    Issue (Month): 2 (March)
    Pages: 214-223

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    Handle: RePEc:eee:regeco:v:39:y:2009:i:2:p:214-223

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    Web page: http://www.elsevier.com/locate/regec

    Related research

    Keywords: FDI Re-investment Plant survival Exit Duration analysis Grants;

    References

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    Citations

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    Cited by:
    1. Colin Wren, 2011. "Geographic Concentration, Observational Equivalence and the Source of Industrial Agglomeration," ERSA conference papers ersa10p1635, European Regional Science Association.
    2. Jonathan Jones & Colin Wren, 2008. "FDI Location Across British Regions and Inward Investment Policy," SERC Discussion Papers 0013, Spatial Economics Research Centre, LSE.
    3. Jonathan Jones & Colin Wren, 2009. "The dynamics of FDI location: a markov analysis for British regions," LSE Research Online Documents on Economics 33497, London School of Economics and Political Science, LSE Library.
    4. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.

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