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Characteristics of foreign-owned firms in British manufacturing

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  • Rachel Griffith

    ()
    (Institute for Fiscal Studies and University of Manchester)

  • Helen Simpson

    ()
    (Institute for Fiscal Studies and CMPO, Bristol)

Abstract

This paper describes the characteristics of manufacturing establishments in Britain over the period 1980 to 1996. Particular attention is paid to differences between plants of different ownership nationality. The findings suggest that establishments that are always foreign-owned have significantly higher labour productivity than those that remain under domestic ownership. In addition, labour productivity improves faster over time and faster with age in foreign-owned establishments. The difference in labour productivity is matched by an equivalent difference in levels of investment per employee. Establishments that change ownership nationality do not seem to experience very large changes in labour productivity levels. The proportion of skilled workers in the workplace, and wages for both skilled and operative workers are higher in foreign-owned establishments than domestic-owned, in line with differences in labour productivity.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W01/10.

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Length: 38 pp
Date of creation: May 2001
Date of revision:
Handle: RePEc:ifs:ifsewp:01/10

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Keywords: foreign direct investment; productivity; multinational firms;

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  1. Harry Grubert & John Mutti, 1991. "Financial Flows versus Capital Spending: Alternative Measures of U.S.-Canadian Investment and Trade in the Analysis of Taxes," NBER Chapters, in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 293-320 National Bureau of Economic Research, Inc.
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  8. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258 National Bureau of Economic Research, Inc.
  9. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-47, October.
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  11. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-38, December.
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  13. 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.
  14. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
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  16. Gavin Cameron & James Proudman & Stephen Redding, 1999. "Openness and its association with productivity growth in UK manufacturing industry," Bank of England working papers 104, Bank of England.
  17. Steven Globerman, 1979. "Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 42-56, February.
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