Foreign Ownership and Productivity
Foreign Ownership and Productivity

Author: Luigi Benfratello

Publisher:

Published: 2015

Total Pages: 0

ISBN-13:

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The purpose of this paper is to estimate the effect of foreign ownership on productivity under reasonable identification assumptions. In particular we estimate dynamic Cobb-Douglas production functions augmented with a set of variables capturing complementary characteristics of foreign ownership. We apply the GMM-System estimator developed by Blundell and Bond (1998) to a large sample of firms located in Italy. Our aggregate findings suggest that, after controlling for unobserved heterogeneity, simultaneity and measurement errors, foreign ownership has no effect on productivity. Therefore we do not find widespread empirical support to the standard internalization theory of foreign direct investment. However, we also find that nationality matters since firms under US ownership tend to be more productive than firms under national ownership. In turn, this additional result suggests that the transfer of knowledge implied by the internalization theory occurs only if the difference between the recipient and the investment country is sufficiently pronounced.

Assessing the Impact of Foreign Ownership on Firm Performance by Size
Assessing the Impact of Foreign Ownership on Firm Performance by Size

Author: Selahattin Selsah Pasali

Publisher:

Published: 2020

Total Pages: 22

ISBN-13:

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Foreign direct investment (FDI) flows are frequently credited with a wide range of benefits for recipient economies. This research investigates the impact mechanics of FDI by mapping the extent to which firms are owned by foreigners against their performance. Firms in both developed and developing countries are included in the study and the performance indicators used are growth in sales, employment and labour productivity. Based on data from more than 80,000 firms during the period 2010 to 2019, this research is unique because it compares the performance of foreign-owned and domestic firms of different sizes. While the preliminary results show foreign ownership overall does give firms an edge on performance, there is no consistent evidence that this is so by firm size. However, across all developing regions, the study consistently finds that foreign ownership has a positive impact on the sales and productivity growth of micro-size firms. This calls for more research on and policy experimentation with outward-oriented and innovative start-ups.

Foreign Direct Investment: Ownership Advantages, Firm Specific Factors, Survival And Performance
Foreign Direct Investment: Ownership Advantages, Firm Specific Factors, Survival And Performance

Author: Mehdi Rasouli Ghahroudi

Publisher: World Scientific

Published: 2018-08-31

Total Pages: 180

ISBN-13: 9813238461

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The purpose of the book is to extend and develop the literature on foreign direct investment (FDI) and multinational corporation (MNCs) subsidiaries. There are several reasons for studying foreign investment and ownership. First, firms need to identify which host country industry factors are important in choosing among the various type of equity ownership (e.g. international joint ventures or wholly-owned subsidiary). Second, international diversification through foreign market entry can provide growth and profitability at rates unavailable in home markets. A third reason this warrants some attention is that type of ownership can affect attempts to counter international competition by engaging foreign rivals on their home turf. Fourth, firms have the option of choosing the appropriate equity ownership for international markets based on balancing their resources, capabilities, and international experience with their desire for ownership and control. This book extends the literature in FDI by providing empirical support for several theories and previously defined and/or tested constructs. For example, the parent and subsidiary's factors measured in this study suggest the importance of internalization and ownership advantages of Dunning's eclectic theory.