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Corporate performance: does ownership matter? A comparison of foreign - and domestic - owned firms in Greece and Portugal




The paper investigates whether multinational corporations (MNCs) operating in Portugal and Greece perform differently than domestic firms using two samples. The first contains 2651 and the second 523 firms operating in Greece in 1997 and Portugal in 1992 respectively. Departures from normality of firms' profitability motivated the adoption of the robust technique of quantile regression. The estimation results suggest that ownership ties do not make a significant difference with respect to performance of firms operating in Portugal. Results were similar for firms operating in Greece and only when firms in the upper quantiles of gross profits were compared, MNCs were found to significantly perform better than domestic firms. It is probably because MNCs have to compensate for their liability of foreigness that in spite of their technological advantages they cannot persistently outperform their domestic rivals.

Suggested Citation

  • Natália Barbosa & Helen Louri, 2003. "Corporate performance: does ownership matter? A comparison of foreign - and domestic - owned firms in Greece and Portugal," NIMA Working Papers 26, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  • Handle: RePEc:nim:nimawp:26

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    References listed on IDEAS

    1. Co, Catherine Y., 2001. "Trade, foreign direct investment and industry performance," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 163-183, January.
    2. Nigel Driffield & Max Munday, 1998. "The impact of foreign direct investment on UK manufacturing: is there a profit squeeze in domestic firms?," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 705-709.
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    More about this item


    multinational corporations; profitability; manufacturing industry Quantile Regression;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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