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Multinationals and US Productivity Leadership: Evidence from Great Britain

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Author Info
Chiara Criscuolo
Ralf Martin

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Abstract

We study the productivity of US owned plants in the UK. Using a new dataset that identifies foreignand domestic MNEs, we find that UK MNEs are less productive than US affiliates, but as productiveas non US foreign affiliates. We investigate the source of the US and MNE advantage. We findevidence confirming that the MNE advantage is driven by sharing superior firm level assets acrossplants and by cherry picking the better plants in a country. The additional superiority of US firmsseems entirely driven by their particular ability to takeover the best British plants. Thirdly, the studyfeatures a novel approach to TFP calculation.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0672.

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Date of creation: Jan 2005
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Handle: RePEc:cep:cepdps:dp0672

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Related research
Keywords: Multinational Firms; Productivity; Foreign Ownership; US leadership; Double Fixed-Effects;

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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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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. Erich Gundlach & Martin Paldam, 2008. "Income and Democracy: A Comment on Acemoglu, Johnson, Robinson, and Yared (2008)," Economics Working Papers 2008-13, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  2. Sourafel Girma & Holger Görg, 2006. "Evaluating the foreign ownership wage premium using a difference-indifferences matching approach," The Institute for International Integration Studies Discussion Paper Series iiisdp165, IIIS. [Downloadable!]
    Other versions:
  3. Helen Simpson, 2007. "Investment abroad and adjustment at home: evidence from UK multinational firms," IFS Working Papers W07/07, Institute for Fiscal Studies. [Downloadable!]
    Other versions:
  4. Chiara Criscuolo & Jonathan E. Haskel & Matthew J. Slaughter, 2005. "Global Engagement and the Innovation Activities of Firms," NBER Working Papers 11479, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. José Luis Iparraguirre D’Elia, 2008. "Essays on Labour Productivity in Northern Ireland," Selected Research Papers ERINI 2008_essays_productivity, Economic Research Institute of Northern Ireland. [Downloadable!]
  6. Jürgen Bitzer & Holger Görg & Philipp Schröder, 2008. "Can trade really hurt? An empirical follow-up on Samuelson's controversial paper," Kiel Working Papers 1451, Kiel Institute for the World Economy. [Downloadable!]
  7. Carol Corrado & Paul Lengermann & Larry Slifman, 2007. "The contribution of multinational corporations to U.S. productivity growth, 1977-2000," Finance and Economics Discussion Series 2007-21, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  8. Giorgia Maffini & Socrates Mokkas, 2008. "Transfer-pricing and Measured Productivity of Multinational Firms," Working Papers 0817, Oxford University Centre for Business Taxation. [Downloadable!]
  9. Holger Breinlich & Chiara Criscuolo, 2008. "Service Traders in the UK," CEP Discussion Papers dp0901, Centre for Economic Performance, LSE. [Downloadable!]
  10. Michael P Devereux, 2008. "Taxation of Outbound Direct Investment: Economic Principles and Tax Policy Considerations," Working Papers 0824, Oxford University Centre for Business Taxation. [Downloadable!]
    Other versions:
  11. Giorgia Maffini & Socrates Mokkas, 2009. "Profit Shifting and Measured Productivity of Multinational Firms," Working Papers 0920, Oxford University Centre for Business Taxation. [Downloadable!]
  12. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2007. "Americans Do I.T. Better: US Multinationals and the Productivity Miracle," NBER Working Papers 13085, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  13. Davide Castellani & Ilaria Mariotti & Lucia Piscitello, 2006. "Outward investments and skill upgrading. Evidence from the Italian case," CESPRI Working Papers 185, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Nov 2006. [Downloadable!]
  14. Johansson, Börje & Lööf, Hans, 2005. "FDI Inflows to Sweden Consequences for Innovation and Renewal," Working Paper Series in Economics and Institutions of Innovation 36, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  15. Robert Breunig & Marn-Heong Wong, 2007. "A Richer Understanding of Australia’s Productivity Performance in the 1990s: Improved estimates based upon firm-level panel data," CEPR Discussion Papers 545, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
    Other versions:
  16. Karpaty, Patrik, 2004. "Are foreign owned firms more productive? Evidence from Swedish firm data," Working Papers 2004:6, Örebro University, Swedish Business School. [Downloadable!]
  17. Ben S. Bernanke, 2006. "The new economic geography: opening remarks," Proceedings, Federal Reserve Bank of Kansas City, pages 1-14. [Downloadable!]
  18. 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:
  19. Hugo Rojas-Romagosa, 2006. "Productivity Effects of FDI Inflows: A Literature Review," CPB Memoranda 170, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  20. Baldwin, John R. & Gu, Wulong, 2005. "Global Links: Multinationals, Foreign Ownership and Productivity Growth in Canadian Manufacturing," The Canadian Economy in Transition 2005009e, Statistics Canada, Economic Analysis Division. [Downloadable!]
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