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Productivity convergence and foreign ownership at the establishment level

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Helen Simpson

    (Institute for Fiscal Studies and CMPO, Bristol)

  • Stephen Redding

    (Institute for Fiscal Studies and University College London)

Abstract

This paper investigates whether there is convergence in Total Factor Productivity towards the technological frontier at the establishment level. We find convergence to the frontier is statistically and quatatively important, suggesting the existence of technology spillovers. Foreign multinationals make up a significant proportion of establishments at the technological frontier, and therefore make a contribution to productivity growth through technology transfer. We also find evidence that increased foreign presence within an industry raises the speed of convergence to the technological frontier.

Suggested Citation

  • Rachel Griffith & Helen Simpson & Stephen Redding, 2002. "Productivity convergence and foreign ownership at the establishment level," IFS Working Papers W02/22, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:02/22
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    More about this item

    Keywords

    Foreign Direct Investment (FDI); knowledge spillovers; competition;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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