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The relative economic performance of foreign subsidiaries in UK manufacturing

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  • Chengqi Wang
  • Pamela Siler
  • Xiaming Liu

Abstract

This paper compares the economic performance of UK and foreign-owned firms in UK manufacturing industry. A panel data set covering 14 233 firms for the period 1992-1996 is used and the influences of firm-, industry- and country-specific advantages on productivity are examined. The results of the study show that labour productivity is higher in foreign subsidiaries than in UK firms and that foreign subsidiaries as a whole employ higher levels of human capital and enjoy greater economies of scale. A further source of productivity advantage for US subsidiaries is their higher level of intangible assets, and for European and Japanese subsidiaries their higher level of capital intensity. The results have policy implications for the targeting of promotion activities to attract FDI.

Suggested Citation

  • Chengqi Wang & Pamela Siler & Xiaming Liu, 2002. "The relative economic performance of foreign subsidiaries in UK manufacturing," Applied Economics, Taylor & Francis Journals, vol. 34(15), pages 1885-1892.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:15:p:1885-1892
    DOI: 10.1080/00036840210128762
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    References listed on IDEAS

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    1. Mark Casson, 1987. "The Firm and the Market: Studies on the Multinational Enterprise and the Scope of the Firm," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031299, January.
    2. Nick Oulton, 1998. "Labour productivity and foreign ownership in the UK," National Institute of Economic and Social Research (NIESR) Discussion Papers 143, National Institute of Economic and Social Research.
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    Cited by:

    1. Zhu, Pingfang & Li, Lei & Lundin, Nannan, 2005. "S&T activities and firm performance : microeconomic evidence from manufacturing in Shanghai," BOFIT Discussion Papers 5/2005, Bank of Finland, Institute for Economies in Transition.
    2. Shujie Yao, 2006. "On economic growth, FDI and exports in China," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 339-351.
    3. Helena Maria Ferreira Rêgo & Celeste Amorim Varum & Anabela Carneiro, 2010. "Empresas Estrangeiras e Capital Humano nos Serviços Intensivos em Conhecimento," Notas Económicas, Faculty of Economics, University of Coimbra, issue 32, pages 06-21, December.
    4. Almas Heshmati & Rachid El-Rhinaoui, 2009. "Effects of Ownership and Market Share on Performance of Mobile Operators in MENA Region," TEMEP Discussion Papers 200921, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.

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