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Multinationals and plant survival

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  • http://www.asb.dk/omos/institutter/departmentofeconomics/
  • GlobID -Globalization and Industry Dynamics
  • http://www.asb.dk/forskning/forskningscentreoggrupper/forskningscentre/ccpcenterforcorporateperformance/
  • Institute of Business and Technology
The aim of this paper is twofold: first, to investigate how different
ownership structures affect plant survival, and second, to analyze how the presence of foreign multinational enterprises (MNEs) affects domestic plants’ survival. Using a unique and detailed data set on the Swedish manufacturing sector, I am able to separate plants into those owned by foreign MNEs, domestic MNEs, exporting non-MNEs, and purely domestic firms. In line with previous findings, the result, when conditioned on other factors affecting survival, shows that foreign MNE plants have lower survival rates than non-MNE plants. However, separating the non-MNEs into exporters and non-exporters, the result shows that foreign MNE plants have higher survival rates than non-exporting non-MNEs, while the survival rates of foreign MNE plants and exporting non-MNE plants do not seem to differ. Moreover, the simple non-parametric estimates show that domestic MNE plants are more likely to exit the market than other plants, also when controlling for plant-specific differences. Finally, foreign presence in the market seems to have had a negative impact on the survival rate of plants in non-exporting non- MNEs, but not to have affected plants in exporting non-MNEs or plants in domestic MNEs.
Original languageEnglish
JournalReview of World Economics
Pages (from-to)609-634
Number of pages25
Publication statusPublished - 2010

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