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Foreign Plants and Industry Productivity: Evidence from Chile

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  • Natalia Ramondo

Abstract

This paper presents new evidence on foreign plants and their effects on a host industry. I test the predictions of a Melitz‐type model using a panel of domestic and foreign plants in the Chilean manufacturing sector. Foreign ownership is a strong predictor of plant productivity and size advantages. Moreover, productivity gains for a domestic incumbent are positively associated with foreign plants' presence in the same industry and region. I also find a positive correlation between foreign entry and exit of less productive domestic plants, but inconclusive evidence on the effects on productivity of new domestic plants.

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  • Natalia Ramondo, 2009. "Foreign Plants and Industry Productivity: Evidence from Chile," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 789-809, December.
  • Handle: RePEc:bla:scandj:v:111:y:2009:i:4:p:789-809
    DOI: 10.1111/j.1467-9442.2009.01583.x
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    File URL: https://doi.org/10.1111/j.1467-9442.2009.01583.x
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    References listed on IDEAS

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    3. Nelson Lind & Natalia Ramondo, 2018. "Innovation, Knowledge Diffusion, and Globalization," NBER Working Papers 25071, National Bureau of Economic Research, Inc.
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    5. Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2012. "Innovation and Foreign Ownership," American Economic Review, American Economic Association, vol. 102(7), pages 3594-3627, December.
    6. Bruce A. Blonigen & Lionel Fontagné & Nicholas Sly & Farid Toubal, 2019. "Cherries for Sale: The Incidence and Timing of Cross-border M&A," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 4, pages 121-177, World Scientific Publishing Co. Pte. Ltd..
    7. Zadia M Feliciano & Robert E Lipsey, 2017. "Foreign Entry into US Manufacturing by Takeovers and the Creation of New Firms," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(1), pages 1-16, January.
    8. Nancy L. Stokey, 2012. "Catching Up and Falling Behind," NBER Working Papers 18654, National Bureau of Economic Research, Inc.
    9. Gianluca Orefice & Nicholas Sly & Farid Toubal, 2021. "Cross-Border Merger and Acquisition Activity and Wage Dynamics," ILR Review, Cornell University, ILR School, vol. 74(1), pages 131-162, January.
    10. Hidehiko Matsumoto, 2018. "Reserve Accumulation, Foreign Direct Investment, and Economic Growth," 2018 Meeting Papers 237, Society for Economic Dynamics.
    11. Grüning, Patrick, 2018. "Heterogeneity in the internationalization of R&D: Implications for anomalies in finance and macroeconomics," Finance Research Letters, Elsevier, vol. 26(C), pages 132-138.
    12. Martin Kliem & Alexander Kriwoluzky, 2014. "Toward a Taylor Rule for Fiscal Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 294-302, April.
    13. Federico Gavazzoni & Ana Maria Santacreu, 2015. "International R&D Spillovers and Asset Prices," Working Papers 2015-41, Federal Reserve Bank of St. Louis.
    14. Anh Ngoc Nguyen & Nguyen Thi Tuong Anh & Nguyen Ngoc Minh & Nguyen Thi Phuong Mai, 2018. "SOUTH KOREAN MULTINATIONAL ENTERPRISES AND VIETNAM SMEs’ PARTICIPATION IN GLOBAL PRODUCTION NETWORKS IN THE CONTEXT OF INCREASED ASEAN AND EAST ASIAN REGIONAL ECONOMIC INTEGRATION," Working Papers 03, Development and Policies Research Center (DEPOCEN), Vietnam.
    15. Hidehiko Matsumoto, . "Foreign Reserve Accumulation, Foreign Direct Investment, and Economic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.
    16. Laura Alfaro & Maggie X. Chen, 2018. "Selection and Market Reallocation: Productivity Gains from Multinational Production," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 1-38, May.
    17. Joel Rodrigue, 2014. "Multinational Production, Exports and Aggregate Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 243-261, April.
    18. Li Shen & Peter Koveos & Xiaodong Zhu & Fei Wen & Jiaxian Liao, 2020. "Outward FDI and Entrepreneurship: The Case of China," Sustainability, MDPI, Open Access Journal, vol. 12(13), pages 1-15, June.
    19. Nancy Stokey, 2012. "Catching Up and Falling Behind," Working Papers 2012-015, Becker Friedman Institute for Research In Economics.
    20. Nancy Stokey, 2015. "Catching up and falling behind," Journal of Economic Growth, Springer, vol. 20(1), pages 1-36, March.

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