Kiel Working Papers, Kiel Institute for World Economics
No 1413:
Characterizing Euro Area Multinationals
Ingo Geishecker, Holger Görg and Daria Taglioni
Abstract: This study uses firm-level data on a large sample of
European manufacturing firms to investigate the links between opening up
foreign affiliates and firms' productivity. The analysis is guided by
recent theoretical models of international trade with firm heterogeneity.
The paper finds that while only a small share of euro area firms locate
affiliates abroad, these firms account for over-proportionally large shares
of output, employment and profits in their home countries. They have higher
survival rates and their productivity growth is also higher. The strongest
contribution is by productivity growth of existing firms with a
multinational status rather than entry into the multinational status.
Finally, there are performance premia for multinationals with a large
number of affiliates abroad relative to those with a small number
Keywords: multinational enterprises, productivity growth, productivity decomposition, survival; (follow links to similar papers)
JEL-Codes: F23,; F43,; L25; (follow links to similar papers)
30 pages, April 2008
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