Firm Growth in Multinational Corporate Groups
AbstractThis paper formulates an econometric firm growth model that explicitly accounts for interdependence of growth performance within multinational corporate networks. We apply a recently introduced IV-estimation procedure for peer group effects to directly test for externalities within multinational corporate networks. Using European firm level data, our results reveal positive externalities within vertically organized multinational networks, while they are negative for horizontally organized ones. In the former case, multinational corporate groups are more stable and adjust faster on average. In the latter case, externalities lead to more heterogeneity in the firm growth processes within the network and slower average size adjustment.
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Bibliographic InfoPaper provided by University of Salzburg in its series Working Papers in Economics and Finance with number 2010-7.
Length: 31 pages
Date of creation: 04 Mar 2010
Date of revision:
Firm growth; Size Adjustment; Multinational Corporate Groups; Peer Group Effect Estimation;
Other versions of this item:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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