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Firm Growth in Multinational Corporate Groups

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  • Oberhofer, Harald

    ()
    (University of Salzburg)

  • Pfaffermayr, Michael

    ()
    (Department of Economics and Statistics, University of Innsbruck)

Abstract

This 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 Info

Paper provided by University of Salzburg in its series Working Papers in Economics and Finance with number 2010-7.

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Length: 31 pages
Date of creation: 04 Mar 2010
Date of revision:
Handle: RePEc:ris:sbgwpe:2010_007

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Keywords: Firm growth; Size Adjustment; Multinational Corporate Groups; Peer Group Effect Estimation;

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References

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Citations

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Cited by:
  1. Crespo Cuaresma, Jesus & Oberhofer, Harald & Vincelette, Gallina A., 2014. "Institutional Barriers and Job Creation in Central and Eastern Europe," Working Papers in Economics and Finance 2014-1, University of Salzburg.
  2. Harald Oberhofer, 2010. "Firm Growth, European Industry Dynamics and Domestic Business Cycles," WIFO Working Papers 377, WIFO.
  3. Peter Huber & Harald Oberhofer & Michael Pfaffermayr, 2014. "Job creation and the intra-distribution dynamics of the firm size distribution," Industrial and Corporate Change, Oxford University Press, vol. 23(1), pages 171-197, February.
  4. Martin Falk, 2008. "Testing Gibrat's Law for European Multinational Enterprises," FIW Research Reports series I-014, FIW.
  5. Oberhofer, Harald & Vincelette, Gallina A, 2013. "Determinants of job creation in eleven new EU member states : evidence from firm level data," Policy Research Working Paper Series 6533, The World Bank.

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