Characterizing Euro Area Multinationals
AbstractThis study uses firm-level data on a large sample of European manufacturing firms to investigate the links between opening up foreign affiliates and firms' productivity. The analysis is guided by recent theoretical models of international trade with firm heterogeneity. The paper finds that while only a small share of euro area firms locate affiliates abroad, these firms account for over-proportionally large shares of output, employment and profits in their home countries. They have higher survival rates and their productivity growth is also higher. The strongest contribution is by productivity growth of existing firms with a multinational status rather than entry into the multinational status. Finally, there are performance premia for multinationals with a large number of affiliates abroad relative to those with a small number
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1413.
Length: 30 pages
Date of creation: Apr 2008
Date of revision:
multinational enterprises; productivity growth; productivity decomposition; survival;
Other versions of this item:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-EEC-2008-04-29 (European Economics)
- NEP-EFF-2008-04-29 (Efficiency & Productivity)
- NEP-INT-2008-04-29 (International Trade)
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