Arbeitspapier

Foreign ownership, returns to scale and productivity: Evidence from UK manufacturing establishments

This Paper calculates returns to scale (RTS) and productivity growth in UK manufacturing establishments in the electronics and food industries. Our results show that foreign establishments tend to have lower returns to scale than their domestic counterparts. We also examine the effect of the acquisition of a domestic establishment by a foreign owner on returns to scale and productivity growth. We use a matching and difference-in-differences methodology, which allows us to construct a reasonable counterfactual and to determine the post-acquisition changes in RTS and productivity that can be attributed to the incidence of acquisition, rather than to changes in other external conditions. In both sectors, acquisition has a negative effect on RTS, although the effect appears stronger in the food sector. The effect of foreign acquisition on productivity differs between sectors; establishments in the electronics sector experience a reduction in productivity post acquisition, while plants in the food sector increase productivity.

Language
Englisch

Bibliographic citation
Series: CEPR Discussion Paper Series ; No. 3503

Classification
Wirtschaft
Multinational Firms; International Business
Production, Pricing, and Market Structure; Size Distribution of Firms
Subject
Skalenertrag
Produktivität
Eigentümerstruktur
Elektronikindustrie
Nahrungsmittelgewerbe
Großbritannien

Event
Geistige Schöpfung
(who)
Girma, Sourafel
Görg, Holger
Event
Veröffentlichung
(who)
Centre for Economic Policy Research (CEPR)
(where)
London
(when)
2002

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Girma, Sourafel
  • Görg, Holger
  • Centre for Economic Policy Research (CEPR)

Time of origin

  • 2002

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