Multinationals and US Poductivity Leadership: Evidence from Great Britain
Advanced Institute of Management Research Paper No. 024
42 Pages Posted: 26 Nov 2008
Date Written: September 24, 2005
We study the productivity of US owned plants in the UK. Using a new dataset that identifes foreign and domestic MNEs, we find that UK MNEs are less productive than US affliates, but as productive as non US foreign affliates. We investigate the source of the US and MNE advantage. We find evidence confirming that the MNE advantage is driven by sharing superior firm level assets across plants and by cherry picking the better plants in a country. The additional superiority of US firms seems entirely driven by their particular ability to takeover the best British plants. Thirdly, the study features a novel approach to TFP calculation.
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