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Re-investment and the survival of foreign-owned plants

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  • Wren, Colin
  • Jones, Jonathan

Abstract

Foreign-owned plants have higher conditional exit rates, and this paper tests the hypothesis that re-investment "embeds" these plants, leading to significantly longer survival time durations. A unique dataset is used for 265 plants that commenced in foreign ownership after 1985 in North East England, distinguishing between start-up ("greenfield") and acquisition plants. Survival is measured at 2000, and the paper analyses the duration to the first re-investment and to survival, allowing for selection into the multiple investment state. It finds that re-investment increases the lifetime of start-up plants, but it is insignificant once selection is controlled for, while for acquisition plants there is no difference. Grants affect selection, but not the survival of plants. The paper offers little support for re-investment as a source of plant "embeddedness".

Suggested Citation

  • Wren, Colin & Jones, Jonathan, 2009. "Re-investment and the survival of foreign-owned plants," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 214-223, March.
    • Handle: RePEc:eee:regeco:v:39:y:2009:i:2:p:214-223
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    6. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.
    7. Jones, Jonathan & Wren, Colin, 2011. "On the relative importance of agglomeration economies in the location of FDI across British regions," LSE Research Online Documents on Economics 58526, London School of Economics and Political Science, LSE Library.
    8. Wren, Colin, 2011. "Geographic concentration and the temporal scope of agglomeration economics: an index decomposition," LSE Research Online Documents on Economics 58351, London School of Economics and Political Science, LSE Library.
    9. Colin Wren, 2011. "Geographic Concentration, Observational Equivalence and the Source of Industrial Agglomeration," ERSA conference papers ersa10p1635, European Regional Science Association.
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