ABSTRACT : This paper studies the effect of foreign-owned companies (FOCs) in the region on establishment survival and growth in the Finnish business sector. We analyze whether the presence of the FOCs has asymmetric effects among the local businesses. Foreign presence in the region is measured in a novel way by using the regional links between establishments and their workers in the local labour markets. Evidence for small service establishments suggests that the presence of the FOCs contributes to aggregate productivity by cleansing inefficient units. The FOCs do not seem to stimulate productivity-enhancing restructuring among large, manufacturing or continuing establishments.
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Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number
1114.
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
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