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Going multinational and ownership:evidence from French matched firms

Author

Listed:
  • Alexandre Gazaniol

    () (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)

  • Frédéric Peltrault

    () (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)

Abstract

(english) This paper estimates the impact of initiating production abroad on firms’ home performance. The analysis covers French manufacturers over the 1996 – 2007 period, and uses propensity-score matching techniques to compare firms which start to invest abroad (“switchers”) to similar domestic firms. The main particularity of our work is to distinguish the impact of initiating production abroad by firm ownership: we separately investigate the performance effect for independent switchers, switchers that own affiliates in France, and French- and foreign-owned switchers. Our first general result is that going multinational has a positive impact on sales, value added, employment, exports and profitability at home. However, we also find evidence that this impact is not independent of ownership. First, firms at the head of business groups are more likely to go multinational, even after controlling for size, Total Factor Productivity (TFP) and industry. Second, we find that parent companies and independent firms do not benefit from improved performance when going multinational: this may reflect that these firms face higher fixed costs than do affiliates of business groups when investing abroad (lack of experience in foreign markets, managerial costs, monitoring and coordinating affiliates, developing and/or adapting support functions etc.). Affiliates of domestic French business groups significantly improve their performance when switching, whereas the performances of foreign-owned firms and affiliates of multinational French groups remain relatively stable. This could show that firms which are already part of multinational groups have little to gain from going multinational themselves, since their group already provides them with skills and network effects, the security of supplies, and knowledge of foreign markets. _________________________________ (français) Ce travail étudie l’impact de l’implantation à l’étranger sur les performances des entreprises françaises du secteur manufacturier au cours de la période 1996-2007. A l’aide d’une méthode d’appariement, les performances des firmes qui s’implantent pour la première fois sont comparées à celles des entreprises domestiques ayant des caractéristiques similaires. La particularité de notre travail est de caractériser l’effet de l’implantation à l’étranger selon l’appartenance à un groupe : nous étudions ainsi séparément l’effet sur les entreprises indépendantes, les entreprises françaises ayant une filiale en France et les entreprises filiales de groupes français et étrangers. L’étude montre que l’implantation à l’étranger a un impact positif en France sur le chiffre d’affaires, la valeur ajoutée, les effectifs, les exportations et la rentabilité. Cependant, il s’avère que le résultat dépend de l’appartenance à un groupe. Tout d’abord, les entreprises têtes de groupe ont une plus forte propension à s’implanter à l’étranger, une fois que l’on tient compte de la taille, de la productivité totale des facteurs (PTF) et du secteur. Ensuite, nous montrons que les têtes de groupes et les entreprises indépendantes n’améliorent pas leurs performances quand elles s’implantent à l’étranger. Ce résultat peut s’expliquer par le fait que ces entreprises supportent des coûts fixes d’implantation plus élevés que les filiales de groupe. Enfin, nous montrons que les entreprises françaises filiales de groupes français améliorent significativement leurs performances alors que celles des filiales de groupes étrangers restent relativement stables. Les entreprises déjà intégrées dans une multinationale pourraient obtenir des gains plus faibles de leur propre implantation à l’étranger dans la mesure où leur groupe leur offre déjà l’accès à un réseau international.

Suggested Citation

  • Alexandre Gazaniol & Frédéric Peltrault, 2011. "Going multinational and ownership:evidence from French matched firms," Working Papers DT/2011/01, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201101
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    File URL: http://www.dial.ird.fr/media/ird-sites-d-unites-de-recherche/dial/documents/publications/doc_travail/2011/2011-01
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    More about this item

    Keywords

    multinational; ownership; firm heterogeneity.;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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