IDEAS home Printed from https://ideas.repec.org/p/lue/wpaper/221.html
   My bibliography  Save this paper

Foreign Ownership and Firm Survival: First evidence for enterprises in Germany

Author

Listed:
  • Joachim Wagner

    () (Institute of Economics, Leuphana University of Lüneburg, Germany)

  • John P. Weche Geluebcke

    () (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

This paper documents the relationship between foreign ownership and firm survival for enterprises in Germany using unique tailor-made new representative data that merge information from surveys performed by the Statistical Offices, from administrative data collected by the Tax Authorities and from a commercial data provider. It contributes to the literature by providing the first evidence on the role of foreign ownership for firm survival in Germany, one of the most important destination countries for foreign direct investments. Our micro-econometric analysis reveals a ceteris paribus higher risk of exit for foreign owned firms in West Germany but not in East Germany.

Suggested Citation

  • Joachim Wagner & John P. Weche Geluebcke, 2011. "Foreign Ownership and Firm Survival: First evidence for enterprises in Germany," Working Paper Series in Economics 221, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:221
    as

    Download full text from publisher

    File URL: https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/lue/pdf/wp_221_Upload.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Baldwin & Beiling Yan, 2011. "The death of Canadian manufacturing plants: heterogeneous responses to changes in tariffs and real exchange rates," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 131-167, April.
    2. Marina-Eliza Spaliara & Holger Görg, 2009. "Financial health, exports, and firm survival: A comparison of British and French firms," Discussion Paper Series 2009_18, Department of Economics, Loughborough University.
    3. Pedro Portugal & José Mata, 2001. "The Survival of New Domestic and Foreign Owned Firms," Working Papers w200101, Banco de Portugal, Economics and Research Department.
    4. Alexander Vogel & Stefan Dittrich, 2008. "European Data Watch: The German Turnover Tax Statistics Panel," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(4), pages 661-670.
    5. Andrew B Bernard & J. Bradford Jensen, 2007. "Firm Structure, Multinationals, and Manufacturing Plant Deaths," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 193-204, May.
    6. Godart, Olivier & Görg, Holger & Hanley, Aoife, 2011. "Surviving the crisis: Foreign multinationals vs domestic firms in Ireland," CEPR Discussion Papers 8596, C.E.P.R. Discussion Papers.
    7. 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.
    8. Fariñas, Jose C. & Ruano, Sonia, 2005. "Firm productivity, heterogeneity, sunk costs and market selection," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 505-534, September.
    9. Alexander Vogel & Joachim Wagner, 2016. "Higher Productivity in Importing German Manufacturing Firms: Self-selection, Learning from Importing or Both?," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 4, pages 139-174 World Scientific Publishing Co. Pte. Ltd..
    10. Alexander Vogel & Stefan Dittrich, 2008. "The German turnover tax statistics panel," Working Paper Series in Economics 92, University of Lüneburg, Institute of Economics.
    11. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, March.
    12. Nils Braakmann & Joachim Wagner, 2011. "Product diversification and stability of employment and sales: first evidence from German manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 3977-3985.
    13. repec:bin:bpeajo:v:24:y:1993:i:1993-1m:p:197-247 is not listed on IDEAS
    14. Hirsch, Seev & Lev, Baruch, 1971. "Sales Stabilization Through Export Diversification," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 270-277, August.
    15. Fukunari Kimura & Kozo Kiyota, 2007. "Foreign‐owned versus Domestically‐owned Firms: Economic Performance in Japan," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 31-48, February.
    16. Alexander Vogel, 2008. "Exports and Productivity in the German Business Services Sector. First Evidence from the Turnover Tax Statistics Panel," Working Paper Series in Economics 89, University of Lüneburg, Institute of Economics.
    17. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    18. Laura Alfaro & Maggie Xiaoyang Chen, 2012. "Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 30-55, August.
    19. John P. Weche Geluebcke, 2011. "Foreign Ownership and Firm Performance in German Services: First Evidence based on Official Statistics," Working Paper Series in Economics 213, University of Lüneburg, Institute of Economics.
    20. Colombo, Massimo G. & Delmastro, Marco, 2000. "A note on the relation between size, ownership status and plant's closure: sunk costs vs. strategic size liability," Economics Letters, Elsevier, vol. 69(3), pages 421-427, December.
    21. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    22. Silviano Esteve-Pérez & Juan Máñez-Castillejo & Juan Sanchis-Llopis, 2008. "Does a “survival-by-exportingâ€\x9D effect for SMEs exist?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(1), pages 81-104, March.
    23. repec:bla:stratm:v:18:y:1997:i:6:p:439-463 is not listed on IDEAS
    24. Braakmann Nils & Wagner Joachim, 2011. "Product Diversification and Profitability in German Manufacturing Firms," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(3), pages 326-335, June.
    25. Jiatao Li & Stephen Guisinger, 1991. "Comparative Business Failures of Foreign-Controlled Firms in the United States," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(2), pages 209-224, June.
    26. Jovanovic, B., 1993. "The Diversification of Production," Working Papers 93-11, C.V. Starr Center for Applied Economics, New York University.
    27. Silviano Pérez & Amparo Llopis & Juan Llopis, 2004. "The Determinants of Survival of Spanish Manufacturing Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(3), pages 251-273, August.
    28. Erol Taymaz & Şule Özler, 2007. "Foreign Ownership, Competition, and Survival Dynamics," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(1), pages 23-42, August.
    29. Michael Konold, 2007. "European Data Watch: New possibilities for economic research through integration of establishment-level panel data of German official statistics," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(2), pages 321-334.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joachim Wagner & John P. Weche Gelübcke, 2016. "Risk or Resilience? The Role of Trade Integration and Foreign Ownership for the Survival of German Enterprises during the Crisis 2008–2010," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 11, pages 369-397 World Scientific Publishing Co. Pte. Ltd..
    2. repec:mul:j0hje1:doi:10.1430/93123:y:2018:i:4:p:523-556 is not listed on IDEAS
    3. Uwe Jirjahn, 2017. "Foreign Ownership and Intra-Firm Union Density in Germany," Research Papers in Economics 2017-09, University of Trier, Department of Economics.
    4. repec:prg:jnlpep:v:2018:y:2018:i:6:id:678:p:621-636 is not listed on IDEAS
    5. Horst Raff & Joachim Wagner, 2014. "Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany," The World Economy, Wiley Blackwell, vol. 37(5), pages 579-591, May.
    6. Eleftherios Giovanis & Oznur Ozdamar, 2018. "Productivity and Resource Misallocation: Evidence from Firms in Middle East and North Africa (MENA) Region Countries," Working Papers 1266, Economic Research Forum, revised 10 Dec 2018.
    7. Adalgiso Amendola & Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2012. "Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy," Economics Bulletin, AccessEcon, vol. 32(3), pages 1914-1926.
    8. Rõõm, Tairi & Meriküll, Jaanika, 2014. "Are foreign-owned firms different? Comparison of employment volatility and elasticity of labour demand," Working Paper Series 1704, European Central Bank.
    9. Stefano Costa & Carmine Pappalardo & Claudio Vicarelli, 2017. "Internationalization choices and Italian firm performance during the crisis," Small Business Economics, Springer, vol. 48(3), pages 753-769, March.
    10. Jaanika Merikull & Tairi Room, "undated". "Are foreign-owned firms different ? Comparision of employment volatility and elasticity of labour demand," Bank of Estonia Working Papers wp2014-1, Bank of Estonia.
    11. Chiara Franco & John P. Weche Gelübcke, 2015. "The Death of German Firms: What Role for Foreign Direct Investment?," The World Economy, Wiley Blackwell, vol. 38(4), pages 677-703, April.
    12. repec:prg:jnlpep:v:preprint:id:678:p:1-16 is not listed on IDEAS
    13. Ahmed Fayez Abdelgouad & Christian Pfeifer & John P Weche Gelübcke, 2015. "Ownership structure and firm performance in the Egyptian manufacturing sector," Economics Bulletin, AccessEcon, vol. 35(4), pages 2197-2212.
    14. Eleftherios Giovanis & Oznur Ozdamar, 2018. "State Business Relations and the Dynamics of Job Flows in Egypt and Turkey," Working Papers 1271, Economic Research Forum, revised 19 Dec 2018.
    15. Anna Ferragina & Fernanda Mazzotta, 2018. "Firm Employment Resilience and FDI: Evidence from Italy," L'industria, Società editrice il Mulino, issue 4, pages 523-556.
    16. repec:eee:proeco:v:208:y:2019:i:c:p:160-170 is not listed on IDEAS
    17. repec:spr:astaws:v:11:y:2017:i:1:d:10.1007_s11943-017-0200-1 is not listed on IDEAS
    18. Verena Dill & Uwe Jirjahn, 2014. "Foreign Owners and Perceived Job Insecurity in Germany: Evidence from Linked Employer-Employee Data," Research Papers in Economics 2014-09, University of Trier, Department of Economics.
    19. Verena Dill & Uwe Jirjahn, 2013. "Foreign Owners and the Quality of Industrial Relations in Germany," Research Papers in Economics 2013-07, University of Trier, Department of Economics.
    20. repec:kap:sbusec:v:49:y:2017:i:2:d:10.1007_s11187-016-9817-7 is not listed on IDEAS
    21. Joachim Wagner, 2014. "Effect of international activity on firm performance," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-47, May.

    More about this item

    Keywords

    Foreign ownership; firm survival; Germany;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lue:wpaper:221. 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: (Joachim Wagner). General contact details of provider: https://leuphana.de/institute/ivwl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.