Characterizing Euro Area Multinationals

Ingo Geishecker, Holger Görg () and Daria Taglioni ()

Kiel Working Papers from Kiel Institute for the World Economy

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 (search for similar items in EconPapers)
JEL-codes: F23 F43 L25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff and nep-int
Date: 2008-04
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Related works:
Journal Article: Characterising Euro Area Multinationals (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:kie:kieliw:1413

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