Skip to main content
SpringerLink
Log in
Book cover

Foreign-owned Firms pp 13–57Cite as

Palgrave Macmillan

Why Foreign-owned Firms are Different: A Conceptual Framework and Empirical Evidence for Austria

  • Chapter

Abstract

Empirical studies continuously reveal differences in the performance of foreign-owned firms (FOFs) and domestically-owned firms (DOFs) across countries, industries, over time and also at the plant level. Empirical evidence, however, is not conclusive. In some studies, FOFs perform better than domestic ones and vice versa. Despite this ambiguity, there is considerable agreement that these differences can be referred to a limited number of explanatory factors, depending on the performance measure chosen (e.g., productivity, profitability, growth, skill or wage).

We are grateful to the participants of the HWWA workshop ‘Foreign-owned Firms — are they different?’ in October 2000 for their comments.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Allan, K. and R. Frances (1999), ‘The tangible contribution of R&D spending of foreign-owned plants to a host region: a plant level study of the Irish manufacturing sector (1980–1996)’, Trinity Economic Papers, No. 7, Dublin.

    Google Scholar 

  • Bellak, C. (2000), ‘Large Multinationals from Small Countries: The Case of Wienerberger Brick Company (Austria)’, in T. Almor and N. Hashai, FDI, International Trade and the Economics of Peacemaking, A Tribute to Seev Hirsch, Rishon LeZion, Israel, Academic Studies Division, College of Management, pp. 216–35.

    Google Scholar 

  • Blanchflower, D. (1984), ‘Comparative Pay Levels in Domestically-owned and Foreign-owned Manufacturing Plants: A Comment’, British Journal of Industrial Relations, Vol. 22, pp. 265–7.

    Article  Google Scholar 

  • Blonigen, Bruce A. and Matthew J. Slaughter (1999), Foreign-Affiliate Activity and U.S. Skill Upgrading, NBER Working Paper, No. 7040, Cambridge.

    Book  Google Scholar 

  • Blonigen, Bruce A. and KaSaundra Tomlin (1999), Size and Growth of Japanese Plants in the United States, NBER Working Paper, No. 7275, Cambridge.

    Book  Google Scholar 

  • Buckley, P.J. (2000), ‘Cross-border governance in multinational enterprises’, in Peter J. Buckley (ed.), Multinational Firms, Cooperation and Competition in the World Economy, Basingstoke, Palgrave Macmillan, pp. 289–304.

    Google Scholar 

  • Carmichael, F. (1992), ‘Multinational Enterprise and Strikes: Theory and Evidence’, Scottish Journal of Political Economy, Vol. 39, No. 1 (February), pp. 52–68.

    Article  Google Scholar 

  • Caves, R. (1996), Multinational Enterprise and Economic Analysis, Cambridge: Cambridge University Press.

    Google Scholar 

  • Cousineau, J.-M., R. Lacroix and D. Vachon (1989), Foreign Ownership and Strike Activity in Canada, Working Paper No. 8927, University of Montreal, Department of Economics.

    Google Scholar 

  • Creigh, S. W. and P. Makeham (1978), ‘Foreign Ownership and Strike-Proneness: A Research Note’, British Journal of Industrial Relations, Vol. 16, pp. 369–72.

    Article  Google Scholar 

  • Davies, S. W. and B. R. Lyons (1991) ‘Characterising Relative Performance: The Productivity Advantage of Foreign Owned Firms in the UK’, Oxford Economic Papers, Vol. 43, pp. 584–95.

    Google Scholar 

  • Davies, S. W. and B. R. Lyons (1996), ‘The Industrial Organisation in the European Union’, Oxford, Clarendon Press.

    Google Scholar 

  • Dickerson, A. P., H. D. Gibson and E. Tsakalotos (1997), ‘The Impact of Acquisitions on Company Performance: Evidence from a Large Panel of UK Firms’, Oxford Economic Papers, No. 49, pp. 344–61.

    Google Scholar 

  • Doms, M. E. and B.J. Jensen (1998), ‘Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States’, in R. E. Baldwin, R. E. Lipsey and J. D. Richardson (eds), Geography and Ownership as Bases for Economic Accounting, Studies in Income and Wealth, Vol. 59, pp. 235–55.

    Google Scholar 

  • Dun & Bradstreet’s, Who owns Whom, various issues.

    Google Scholar 

  • Egger, P., M. Pfaffermayr and Y. Wolfmayr-Schnitzer (2000), The International Fragmentation of the Value Added Chain: The Effects of Outsourcing to Eastern Europe on Productivity, Employment and Wages in Austrian Manufacturing, Vienna, WIFO.

    Google Scholar 

  • European Commission (1997), ‘The Joint Harmonized EU Programme of Business and Consumer Surveys’, European Economy, Reports and Studies 6.

    Google Scholar 

  • Feliciano, Z. and R. E. Lipsey (1999), Foreign Ownership and Wages in the United States, 1987–1992, NBER Working Paper, No. 6932, Cambridge.

    Book  Google Scholar 

  • Fors, G. (1997), ‘Utilization of R&D Results in the Home and Foreign Plants of Multinationals’, Journal of Industrial Economics, Vol. XLV, No. 2 (June), pp. 341–58.

    Google Scholar 

  • Glatz, H. and H. Moser (1989), Ausländische Direktinvestitionen in Österreich, Frankfurt, Campus.

    Google Scholar 

  • Globerman, Steven, John C. Ries and Ilan Vertinsky (1994), ‘The economic performance of foreign affiliates in Canada’, Canadian Journal of Economics, Vol. XXVII, No. 1, pp. 143–56.

    Article  Google Scholar 

  • Gomes, L. and K. Ramaswamy, (1999), ‘An Empirical Examination of the Form of Relationship Between Multinationality and Performance’, Journal of International Business Studies, Vol. 30, No. 1 (First Quarter), pp. 173–88.

    Article  Google Scholar 

  • Greer, C. R. and J. C. Shearer (1981), ‘Do Foreign-Owned Firms Practice Unconventional Labor Relations?’, Monthly Labor Review, Vol. 104, pp. 44–8.

    Google Scholar 

  • Gugler, K. (1998), ‘Corporate Ownership Structure in Austria’, Empirica, Vol. 25, No. 3, pp. 285–307.

    Article  Google Scholar 

  • Hahn, F. R., P. Mooslechner and M. Pfaffermayr (1996), Globalisierungstendenzen in der österreichischen Wirtschaft, Vienna, WIFO.

    Google Scholar 

  • Hamilton, L. (1998), Statistics with Stata 5 (Pacific Grove, CA, Duxbury Press).

    Google Scholar 

  • Head, K. (1998), Comment, in R. E. Baldwin, R. E. Lipsey and J. D. Richardson (eds), Geography and Ownership as Bases for Economic Accounting, Studies in Income and Wealth, Vol. 59, NBER, University of Chicago Press, Chicago, pp. 255–8.

    Google Scholar 

  • Howenstine, N. G. and W. J. Zeile (1992), ‘Foreign Direct Investment in the United Stages: Establishment Data for 1987’, Survey of Current Business, October, pp. 44–58.

    Google Scholar 

  • Kumar, M. S. (1984), ‘Comparative Analysis of UK Domestic and International Firms’, Journal of Economic Studies, Vol. 11, No. 3, pp. 26–42.

    Article  Google Scholar 

  • Kumar, N. (1990), ‘Mobility Barriers and Profitability of Multinational and Local Enterprises in Indian Manufacturing’, Journal of Industrial Economics, Vol. XXXVIII, No. 4, pp. 449–63.

    Article  Google Scholar 

  • Maliranta, M. (1997), Plant Productivity in Finnish Manufacturing, ETLA-The Research Institute of the Finnish Economy Discussion Papers, No. 612, Helsinki.

    Google Scholar 

  • Markusen, J. R. (1984), ‘Multinationals, Multi-plant Economies and the Gains from Trade’, Journal of International Economics, 16 (May), pp. 205–26.

    Article  Google Scholar 

  • Markusen, J. R. (1995), ‘The Boundaries of Multinational Enterprises and the Theory of International Trade’, Journal of Economic Perspectives, Vol. 9, No. 2 (Spring), pp. 169–89.

    Article  Google Scholar 

  • Martin, S. (1993), Advanced Industrial Economics, Oxford and Cambridge, MA, Basil Blackwell.

    Google Scholar 

  • Mataloni, R. J. (2000), ‘An Examination of the Low Rates of Return of Foreign-Owned U.S. Companies’, Survey of Current Business, March, pp. 55–73.

    Google Scholar 

  • McGuckin, R. H. and S. V. Nguyen (1995), ‘On productivity and plant ownership change: new evidence from the Longitudinal Research Database’, RAND Journal of Economics, Vol. 26, No. 2 (Summer), pp. 257–76.

    Article  Google Scholar 

  • Moden, K.-M. (1998), ‘Foreign acquisitions of Swedish companies: Effects on R&D and Productivity’, IUI, Stockholm, mimeo.

    Google Scholar 

  • OECD (1996), Globalisation of Industry, Paris.

    Google Scholar 

  • Oulton, N. (1998a), Investment, Capital and Foreign Ownership in UK Manufacturing, National Institute of Economic and Social Research (NIESR) Discussion Paper, No. 141, August.

    Google Scholar 

  • Oulton, N. (1998b), Labour Productivity and Foreign Ownership, NIESR Discussion Paper, No. 143, September.

    Google Scholar 

  • Pfaffermayr, M. (1999), ‘Ownership Advantages, Foreign Production and Productivity — Evidence from Austrian Manufacturing’, Review of Industrial Organisation, No. 15(4), pp. 379–96.

    Article  Google Scholar 

  • Porter, M. E. (1990), The Competitive Advantage of Nations, Cambiridge, MA, Harvard University Press.

    Book  Google Scholar 

  • Rogers, W. H. (1992), ‘Quantile Regression Errors’, Stata Technical Bulletin, No. 9, pp. 16–19.

    Google Scholar 

  • Scherer, F. M., A. Bechstein, E. Kaufer and R. D. Murphy (1975), The Economics of Multi-Plant Operation: An International Comparison Study, Cambridge, MA, Harvard University Press.

    Google Scholar 

  • Sutton, J. (1991), Sunk Cost and Market Structure: Price Competition, Advertising and the Evolution of Concentration, Cambridge, MA, MIT Press.

    Google Scholar 

  • Ylä-Antilla, P. and J. Ali-Yrkkö (1997), ‘Foreign owners set their sights higher than local ones’, Unitas, No. 2, pp. 14–19.

    Google Scholar 

  • Zeckhauser, R. J. and J. Pound (1990), ‘Are Large Shareholders Effective Monitors? An Investigation of Share Ownership and Corporate Performance’, in G. Hubbard (ed.), Asymmetric Information, Corporate Finance and Investment, Chicago, University of Chicago Press.

    Google Scholar 

Download references

Authors
  1. Michael Pfaffermayr
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Christian Bellak
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Hamburg Institute of International Economics (HWWA), Germany

    Rolf Jungnickel (head of the research program ‘International Mobility of Firms and Labour’) (head of the research program ‘International Mobility of Firms and Labour’)

Copyright information

© 2002 Michael Pfaffermayr and Christian Bellak

About this chapter

Cite this chapter

Pfaffermayr, M., Bellak, C. (2002). Why Foreign-owned Firms are Different: A Conceptual Framework and Empirical Evidence for Austria. In: Jungnickel, R. (eds) Foreign-owned Firms. Palgrave Macmillan, London. https://doi.org/10.1057/9780230503434_2

Download citation

Publish with us

Policies and ethics

Search

Navigation