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Multinationals and U.S. Productivity Leadership: Evidence from Great Britain

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  • Chiara Criscuolo

    (Centre for Economic Performance (CEP), London School of Economics (LSE))

  • Ralf Martin

    (Centre for Economic Performance (CEP), London School of Economics (LSE))

Abstract

We study the productivity of U.S. and other foreign-owned plants in the United Kingdom. Using a new data set that can identify for the first time domestic U.K. MNEs in such a study, we find that U.K. MNEs are less productive than U.S. affiliates, but as productive as non-U.S. foreign affiliates. Exploiting dynamic variation in our data, we find evidence suggesting that this additional U.S. advantage is due to the takeover of already highly productive U.K. plants rather than the sharing of superior firm-specific assets. The study also features a novel approach to TFP calculation. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 2 (May)
Pages: 263-281

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Handle: RePEc:tpr:restat:v:91:y:2009:i:2:p:263-281

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  1. Ralf Martin, 2005. "Productivity Dispersion, Competition and Productivity Measurement," CEP Discussion Papers dp0692, Centre for Economic Performance, LSE.
  2. Rachel Griffith & Helen Simpson, 2004. "Characteristics of Foreign-Owned Firms in British Manufacturing," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 147-180 National Bureau of Economic Research, Inc.
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  13. Haijime Katayama & Shihua Lu & James Tybout, 2003. "Why Plant-Level Productivity Studies are Often Misleading, and an Alternative Approach to Interference," NBER Working Papers 9617, National Bureau of Economic Research, Inc.
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  16. Rachel Griffith, 1999. "Using the ARD establishment level data to look at foreign ownership and productivity in the UK," IFS Working Papers W99/06, Institute for Fiscal Studies.
  17. Klette, Tor Jakob, 1999. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 451-76, December.
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