TY - JOUR
T1 - Foreign ownership and productivity
T2 - New evidence from the service sector and the R and D lab
AU - Griffith, Rachel
AU - Redding, Stephen
AU - Simpson, Helen
N1 - Funding Information:
1 This work was funded by the ESRC through the Centre for Microeconomic Analysis of Public Policy at the Institute for Fiscal Studies and AIM. We are grateful to David Greenaway, Ken Mayhew, an anonymous referee, and participants at the Oxford Review’s seminar for helpful comments. This work contains statistical data from the ONS which is Crown Copyright and reproduced with the permission of the controller of HMSO and the Queen’s Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. All errors and omissions remain the responsibility of the authors.
PY - 2004/9
Y1 - 2004/9
N2 - This paper examines the relationship between foreign ownership and productivity, paying particular attention to two issues neglected in the existing literature-the role of multinationals in service sectors and the importance of R&D activity conducted by foreign multinationals. We review existing theoretical and empirical work which largely focuses on manufacturing, before presenting new evidence using establishment-level data on production, service, and R&D activity for Great Britain. Wefind that multinationals play an important role in service sectors and that entry offoreign mulfinationals by takeover is more prevalent than greenfield investment. We find that British multinationals have lower levels of labour productivity thanforeign multinationals, but the difference is less stark in the service sector than in the production sector, and that British multinationals have lower levels of investment and intermediate use per employee. We also find that foreign-owned multinationals conduct a substantial amount of British R&D. We discuss the implications of these and other findings for thepolicy debate on incentives to influence multinational firms'location choices.
AB - This paper examines the relationship between foreign ownership and productivity, paying particular attention to two issues neglected in the existing literature-the role of multinationals in service sectors and the importance of R&D activity conducted by foreign multinationals. We review existing theoretical and empirical work which largely focuses on manufacturing, before presenting new evidence using establishment-level data on production, service, and R&D activity for Great Britain. Wefind that multinationals play an important role in service sectors and that entry offoreign mulfinationals by takeover is more prevalent than greenfield investment. We find that British multinationals have lower levels of labour productivity thanforeign multinationals, but the difference is less stark in the service sector than in the production sector, and that British multinationals have lower levels of investment and intermediate use per employee. We also find that foreign-owned multinationals conduct a substantial amount of British R&D. We discuss the implications of these and other findings for thepolicy debate on incentives to influence multinational firms'location choices.
UR - http://www.scopus.com/inward/record.url?scp=8644251357&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=8644251357&partnerID=8YFLogxK
U2 - 10.1093/oxrep/grh026
DO - 10.1093/oxrep/grh026
M3 - Article
AN - SCOPUS:8644251357
SN - 0266-903X
VL - 20
SP - 440
EP - 456
JO - Oxford Review of Economic Policy
JF - Oxford Review of Economic Policy
IS - 3
ER -