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Why Foreign-Owned Firms are Different: A Conceptual Framework and Empirical Evidence for Austria

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Author Info
Pfaffermayr, Michael
Bellak, Christian

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Abstract

This study examines performance gaps among foreign-owned and domestically-owned Austrian firms. In line with earlier findings our results suggest that the positive effects of participating in a foreign multinational's network can mainly be found in productivity and profitability. A further distinction between purely national firms and multinational enterprises (MNEs) reveals that both gaps derive from gains of MNE networks rather than from ownership per se. Regardless of ownership, MNEs are more similar than MNEs and purely national firms. Gaps concerning the investment propensity and growth are primarily explained by firm characteristics rather than foreign ownership. There is no evidence of an additional bonus resulting from closer cultural proximity of German-owned firms. Diese Studie untersucht Unterschiede in der Performance auslandskontrollierter und heimischer Unternehmen in Österreich. Die Ergebnisse bestätigen insofern frühere Untersuchungen, als die wichtigsten Vorteile auslandskontrollierter Unternehmen in der überlegenen Produktivität und Rentabilität gesehen werden. Bei Unterscheidung der österreichischen Firmen in rein nationale und multinationale Firmen (MNE) zeigt sich, daß österreichische und ausländische MNE einander ähnlicher sind als die österreichischen MNE und rein nationale Firmen. Die aufgezeigten Performance- Unterschiede resultieren eher aus der Einbindung in MNE-Netzwerke als aus dem Auslandseigentum an sich. Unterschiedliche Investitionsneigung und Wachstumsverläufe lassen sich primär durch unternehmensspezifische Faktoren und weniger durch das Auslandseigentum erklären. Es ergeben sich keine Anhaltspunkte für einen zusätzlichen Performance-Vorsprung deutscher Investoren aus deren kultureller Nähe zu Österreich.

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Paper provided by Hamburg Institute of International Economics in its series Discussion Paper Series with number 26372.

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Date of creation: 2000
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Handle: RePEc:ags:hiiedp:26372

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Related research
Keywords: Multinational Enterprises; Industry Studies; Organisation of Production Labour Productivity; Industrial Organization; F23; L6; L23; J24;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Michael Pfaffermayr, 1999. "Ownership Advantages, Foreign Production and Productivity: Evidence from Austrian Manufacturing Firms," Review of Industrial Organization, Springer, vol. 15(4), pages 379-396, December. [Downloadable!] (restricted)
  2. Cohen, Benjamin I, 1973. "Comparative Behavior of Foreign and Domestic Export Firms in a Developing Economy," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 190-97, May. [Downloadable!] (restricted)
  3. Robert E. Baldwin & Robert E. Lipsey & J. David Richards, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1.
  4. Markusen, James R, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-89, Spring. [Downloadable!] (restricted)
  5. Robert H. McGuckin & Sang V. Nguyen, 1995. "On Productivity and Plant Ownership Change: New Evidence from the Longitudinal Research Database," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 257-276, Summer. [Downloadable!] (restricted)
  6. Dickerson, Andrew P & Gibson, Heather D & Tsakalotos, Euclid, 1997. "The Impact of Acquisitions on Company Performance: Evidence from a Large Panel of UK Firms," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 344-61, July. [Downloadable!] (restricted)
  7. Carmichael, F, 1992. "Multinational Enterprise and Strikes: Theory and Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(1), pages 52-68, February.
  8. Nicholas Oulton, 1998. "Investment, Capital and Foreign Ownership in UK Manufacturing," NIESR Discussion Papers 141, National Institute of Economic and Social Research. [Downloadable!]
  9. Zadia Feliciano & Robert E. Lipsey, 1999. "Foreign Ownership and Wages in the United States, 1987 - 1992," NBER Working Papers 6923, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Klaus Gugler, 1998. "Corporate Ownership Structure in Austria," Empirica, Springer, vol. 25(3), pages 285-307, January. [Downloadable!] (restricted)
  11. Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, 04. [Downloadable!] (restricted)
    Other versions:
  12. Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 30(1), pages 173-187, March. [Downloadable!] (restricted)
  13. Steven Globerman & John C. Ries & Ilan Vertinsky, 1994. "The Economic Performance of Foreign Affiliates in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 143-56, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Giorgio Barba Navaretti & Davide Castellani, 2003. "Investments Abroad and Performance at Home Evidence from Italian Multinationals," Development Working Papers 180, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
    Other versions:
  2. Schiffbauer, Marc & Siedschlag, Iulia & Ruane, Frances, 2009. "Do Foreign Mergers & Acquisitions Boost Firm Productivity?," Papers DYNREG47, Economic and Social Research Institute (ESRI). [Downloadable!]
  3. Börje Johansson & Hans Lööf & Amy Rade Olsson, 2005. "Firm location, Corporate Structure, R&D Investment, Innovation and Productivity," ERSA conference papers ersa05p108, European Regional Science Association. [Downloadable!]
    Other versions:
  4. Davide Castellani & Giorgia Giovannetti, 2009. "Productivity and the international firm: dissecting heterogeneity," Development Working Papers 270, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
  5. Karlsson, Charlie & Johansson, Börje & Stough, Roger, 2008. "Entrepreneurship and Innovation in Functional Regions," Working Paper Series in Economics and Institutions of Innovation 144, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  6. Richard Harris & Catherine Robinson, 2003. "Foreign Ownership and Productivity in the United Kingdom Estimates for U.K. Manufacturing Using the ARD," Review of Industrial Organization, Springer, vol. 22(3), pages 207-223, May. [Downloadable!] (restricted)
  7. Joze P. Damijan & Matija Rojec & Maja Ferjancic, 2008. "Growing export performance of transition economies: EU market access versus supply capacity factors," LICOS Discussion Papers 20208, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  8. Bandick, Roger, 2004. "Do Workers Benefit from Foreign Ownership? Evidence from Swedish manufacturing," Working Paper Series 201, Trade Union Institute for Economic Research. [Downloadable!]
    Other versions:
  9. Johansson, Börje & Lööf, Hans, 2006. "Innovation Activities Explained By Firm Attributes And Location," Working Paper Series in Economics and Institutions of Innovation 63, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
    Other versions:
  10. Martinsson, Gustav & Lööf, Hans, 2009. "Internal Finance and Patents - evidence from firm-level data," Working Paper Series in Economics and Institutions of Innovation 194, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  11. Jürgen Janger, 2005. "The Research and Development System in Austria — Input and Output Indicators," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 43-57, April. [Downloadable!]
  12. Roy Thurik & Enrico Santarelli & David Audretsch & Luuk Klomp, 2002. "Gibrat's Law: Are the Services Different?," Scales Research Reports H200201, EIM Business and Policy Research. [Downloadable!]
    Other versions:
  13. Blandina Oliveira & Adelino Fortunato, 2008. "The dynamics of the growth of firms: evidence from the services sector," Empirica, Springer, vol. 35(3), pages 293-312, July. [Downloadable!] (restricted)
    Other versions:
  14. Richard Harris, 2009. "Spillover and Backward Linkage Effects of FDI: Empirical Evidence for the UK," SERC Discussion Papers 0016, Spatial Economics Research Centre, LSE. [Downloadable!]
  15. Jungnickel, Rolf & Keller, Dietmar, 2003. "Foreign-Owned Firms in the German Labour Market," Discussion Paper Series 26149, Hamburg Institute of International Economics. [Downloadable!]
  16. Agustinus, Prasetyantoko, 2007. "Foreign Ownership and Firm Financing Constraint in Indonesia," MPRA Paper 6500, University Library of Munich, Germany. [Downloadable!]
  17. Christian Bellak, 2001. "Multinational Enterprises and Their Domestic Counterparts: Past Research, Current Issues and Future Directions," Working Papers geewp18, Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness. [Downloadable!]
  18. Marc Schiffbauer & Iulia Siedschlag & Frances Ruane, 2009. "Do Foreign Mergers and Acquisitions Boost Firm Productivity?," Papers WP305, Economic and Social Research Institute (ESRI). [Downloadable!]
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