Foreign Plants and Industry Productivity: Evidence from Chile
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. Copyright The editors of the "Scandinavian Journal of Economics" 2009 .
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Volume (Year): 111 (2009)
Issue (Month): 4 (December)
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