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Productivity convergence and foreign ownership at the establishment level

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  • Rachel Griffith

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

  • Helen Simpson

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

  • Stephen Redding

    ()
    (Institute for Fiscal Studies and University College London)

Abstract

This paper investigates whether there is convergence in Total Factor Productivity towards the technological frontier at the establishment level. We find convergence to the frontier is statistically and quatatively important, suggesting the existence of technology spillovers. Foreign multinationals make up a significant proportion of establishments at the technological frontier, and therefore make a contribution to productivity growth through technology transfer. We also find evidence that increased foreign presence within an industry raises the speed of convergence to the technological frontier.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W02/22.

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Length: 35
Date of creation: Dec 2002
Date of revision:
Handle: RePEc:ifs:ifsewp:02/22

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Keywords: Foreign Direct Investment (FDI); knowledge spillovers; competition;

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