A note on ownership and productivity in UK businesses

Ralf Martin and Chiara Criscuolo

No 6, United Kingdom Stata Users' Group Meetings 2002 from Stata Users Group

Abstract: A series of studies in a number of countries have found that foreign-owned firms are more productive than domestic firms. However, almost all this work compares foreign firms - which are, by definition, multinationals - with all domestic firms. This paper analyses for the first time in the UK the relative productivity performance of foreign-owned manufacturing firms and UK manufacturing firms split into UK Multinationals and UK pure domestic firms. This was not possible before because none of the datasets used for productivity analysis distinguished between domestic multinational and non-multinational firms. We are able to make such a distinction. Our results suggest that the foreign productivity advantage is by and large a multinational effect. US multinational firms, however, seem to maintain a productivity advantage with respect to both other foreign-owned firms and domestic multinational firms. Interestingly, this UK result mirrors and extends results for the US by Doms and Jensen. We use Stata to deal with changes in raw data files in a consistent manner and to link together data about the same units collected at different levels of aggregation in a sensible way in order to do econometric analysis.

Date: 2002-05-11
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Persistent link: https://EconPapers.repec.org/RePEc:boc:usug02:6

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