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Foreign Ownership and Exports of Thai Manufacturing Plants by Industry in 1996

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  • Ramstetter, Eric D.

Abstract

This paper investigates how foreign multinational enterprises (MNEs) contributed to exports by Thai manufacturing plants at the industry level in 2006. The mean export-sales ratio (export propensities) in heavily-foreign MNEs with foreign ownership shares of 90 percent or more exceeded 50 percent and heavily-foreign MNEs accounted for one-third of plant exports. Minority-foreign (10-49% foreign shares) and majority-foreign (50-89% shares) MNEs combined to account for another one-fifth of plant exports but had lower export propensities, about 30 percent and 40 percent, respectively. The mean export propensity for local plants in 20 sample industries was only 15 percent. In large samples of all 20 industries combined, econometric estimates controlling for industry affiliation with intercept dummies as well as the effects of the scale, age, factor intensities or labor productivity, and BOI-promotion status of plants also indicated that export propensities were the highest in heavily-foreign MNEs, followed by majority-foreign MNEs, minority-foreign MNEs, and lastly by local plants. Moreover, ownership-related differences in export propensities were highly significant statistically. When inter-industry heterogeneity was more fully accounted for by allowing slope coefficients as well as intercepts to differ among the 20 industries, export propensities were the highest in heavily-foreign MNEs and significantly higher than in local plants in 12 industries. However, differences among MNE ownership groups were usually insignificant and MNE-local differentials in export propensities differed substantially among industries, suggesting it is important account for inter-industry heterogeneity as fully as possible.

Suggested Citation

  • Ramstetter, Eric D., 2018. "Foreign Ownership and Exports of Thai Manufacturing Plants by Industry in 1996," AGI Working Paper Series 2018-05, Asian Growth Research Institute.
  • Handle: RePEc:agi:wpaper:00000144
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    References listed on IDEAS

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    1. Ramstetter, Eric D. & Trung Nguyen, Kien, 2016. "Multinational Enterprises and Vietnam’s Exports: Comparing Economy-wide and Firm-level Evidence," AGI Working Paper Series 2016-22, Asian Growth Research Institute.
    2. Kien Trung Nguyen & Eric D. Ramstetter, 2017. "Wage Differentials among Ownership Groups and Worker Quality in Vietnamese Manufacturing," Global Economic Review, Taylor & Francis Journals, vol. 46(3), pages 232-250, July.
    3. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    4. Caves,Richard E., 2007. "Multinational Enterprise and Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521677530, July - De.
    5. Theodore H. Moran, 2001. "Parental Supervision: The New Paradigm for Foreign Direct Investment and Development," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa64, February.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    8. Athukorala, Premachandra & Jayasuriya, Sisira & Oczkowski, Edward, 1995. "Multinational firms and export performance in developing countries: Some analytical issues and new empirical evidence," Journal of Development Economics, Elsevier, vol. 46(1), pages 109-122, February.
    9. repec:wsi:serxxx:v:54:y:2009:i:04:n:s0217590809003513 is not listed on IDEAS
    10. Ramstetter, Eric D. & Narjoko, Dionisius, 2013. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Education in Indonesian Manufacturing," AGI Working Paper Series 2013-23, Asian Growth Research Institute.
    11. 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, March.
    12. Caves,Richard E., 2007. "Multinational Enterprise and Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521860130, July - De.
    13. Matthew A. Cole & Robert J. R. Elliott & Supreeya Virakul, 2010. "Firm Heterogeneity, Origin of Ownership and Export Participation," The World Economy, Wiley Blackwell, vol. 33(2), pages 264-291, February.
    14. Eric D. Ramstetter, 2014. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Quality in Malaysian Manufacturing," Asian Development Review, MIT Press, vol. 31(2), pages 55-76, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    ownership; multinational enterprises; exports; Thailand; manufacturing; F14; F23; L33; L60; L81; O53;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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