Empirical Evidence on Foreign Ownership and Productivity Growth

  • Sourafel Girma
  • Steve Thompson
  • Peter Wright


It has frequently been noted that foreign owned firms appear to have higher levels of productivity than their domestic counterparts. The most common explanation for such a differential is that multinational affiliates enjoy firm-specific proprietary assets, which may be techno-logical or may be intangible factors such as organisational or brand name advantages, which gives the firm a productivity advantage over its domestic rivals. Indeed, the dominant ‘internalisation theory’ primarily considers the multinational firm as a means to transfer firm-specific pro-prietary assets whilst avoiding the costs associated with international transactions.1


Foreign Direct Investment Labour Productivity Productivity Growth Total Factor Productivity Foreign Firm 
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© Sourafel Girma, Steve Thompson and Peter Wright 2005

Authors and Affiliations

  • Sourafel Girma
  • Steve Thompson
  • Peter Wright

There are no affiliations available

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