Multinationals, foreign ownership and US productivity leadership: Evidence from the UK
Several studies using firm level data find that foreign-owned firms are more productive than domestic ones. This could reflect a foreign advantage or an omitted variable bias: foreign firms are by definition multinational enterprises (MNEs), and MNEs are typically more productive than non-MNEs. This paper attempts to discriminate between these hypotheses. We are the first to study the productivity of foreign owned firms relative to UK firms separated into MNEs and non-MNEs. We obtain three main results. First, the foreign productivity advantage is mostly a multinational advantage: MNEs, foreign and UK, are more productive than non-MNEs. Second, US owned firms maintain a productivity advantage with respect to both UK and other foreign owned firms. Third, examining the longitudinal dimension of our data we find no evidence that higher MNE productivity is driven by sharing superior firm specific knowledge among affiliated plants. Thus, the MNE advantage must lie in an ability to takeover already productive plants or in setting up above average productivity plants on green field.
|Date of creation:||04 Jun 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 1334 462479
Web page: http://www.res.org.uk/society/annualconf.aspEmail:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ecj:ac2003:50. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.