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Foreign ownership and firm performance in German services

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  • John Philipp Weche Gelübcke

Abstract

This study provides the first comprehensive analysis of foreign-controlled enterprises in the German service sector based on new micro-data from official German statistics. Various performance measures were examined via comparison of unconditional and conditional means and through use of quantile regression techniques. Foreign-controlled affiliates consistently performed better than German-owned affiliates. In contrast, profitability exhibited precisely the opposite trend. Moreover, labour productivity did not significantly differ when the comparison group consisted of domestically owned affiliates with a high degree of internationalization. A breakdown by country of origin showed that European affiliates pay lower wages and export less relative to non-European affiliates, and US firms have no productivity advantage as in manufacturing.

Suggested Citation

  • John Philipp Weche Gelübcke, 2013. "Foreign ownership and firm performance in German services," The Service Industries Journal, Taylor & Francis Journals, vol. 33(15-16), pages 1564-1598, December.
    • Handle: RePEc:taf:servic:v:33:y:2013:i:15-16:p:1564-1598
    DOI: 10.1080/02642069.2011.638711
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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, December.
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    Cited by:

    1. John Weche Gelübcke, 2013. "The performance of foreign affiliates in German manufacturing: evidence from a new database," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 151-182, March.
    2. Baliamoune-Lutz, Mina & Basuony, Mohamed A. K. & Lutz, Stefan & Mohamed, Ehab K. A., 2022. "International ownership and SMEs in Middle Eastern and African economies," Working Paper Series 22, Frankfurt University of Applied Sciences, Faculty of Business and Law.

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