Holger Görg

Abstract.  In this paper we analyse productivity spillovers from foreign direct investment using firm‐level panel data for U.K. manufacturing industries from 1992 to 1999. We investigate spillovers through horizontal, backward, and forward linkages; distinguish spillovers from export‐oriented vs domestic‐market‐oriented FDI; and allow for differing effects, depending on domestic firms' export activities. The results suggest that the mechanisms through which spillovers affect domestic firms are very complex and that there are substantial differences in spillover benefits for domestic exporters and non‐exporters, and from different types of inward investment.

This paper investigates the effects of domestic privatisation or foreign acquisition of Chinese State‐owned Enterprises (SOEs) on employment growth, using firm level data for China and a combination of propensity score matching and difference‐in‐differences in order to identify the causal effect. Our results suggest that, controlling for output growth there is some evidence that domestic privatisation leads to contemporaneous reductions in employment growth compared to firms that did not undergo an ownership change. By contrast, there is some evidence that foreign acquisitions show higher employment growth in the post acquisition period than non‐acquired SOEs.

This study decomposes the productivity advantage of foreign multinationals into a technology and a scale effect and analyses the causal relationship between foreign ownership and these two components. This is done by analyzing the effects of an acquisition of a domestic establishment by a foreign multinational, using a combined propensity score matching and difference‐in‐differences estimation. The main results show that any positive impact of acquisition is predominantly due to changes in technical efficiency and not in scale and that the preacquisition productivity of the target plays a role in mediating the rate of technology transfer from the multinational. (JEL F23, L22)

We study the regional location decision of multinationals in Ireland since the 1970s by focusing on the role played by agglomeration economies and by a distinct change in regional policy intent on dispersing industrial activity to the more disadvantaged areas of Ireland. We find that regional policy has only been effective in attracting low-tech firms to the disadvantaged areas during the time when there was a more indirect approach to regional policy. Our results also show that hi-tech firms spread more evenly across the country and that urbanization economies were for these firms a more important locational determinant than public incentives.

While there is a large empirical literature on productivity spillovers from multinationals, this literature treats the channels through which these spillover effects work as a black box. The new approach in this paper is to investigate whether spillovers occur via worker mobility. We use data on whether or not the owner of a domestic firm has previous experience in a multinational, and relate this information to firm‐level productivity. Our results suggest that firms which are run by owners who worked for multinationals in the same industry immediately prior to opening up their own firm are more productive than other domestic firms.

Summary: Investment incentives targeted at attracting multinational firms have been extensively researched, and empirical evidence has shown them to be influential. The same is not true of exit restrictions. Yet, as recent theory suggests, there may be a trade‐off between entry incentives and ease of exit. This paper focuses on that trade‐off in the case of US multinationals in 33 host countries. An indicator of labour market regulations is used as a measure of ease of exit. Results suggest that both entry incentives and labour market regulations are important and ignoring the latter neglects an important dimension in firms' location decision.

In this paper we investigate the driving factors behind the diverse employment performances of indigenous and foreign‐owned (multinational) plants in Ireland. Examining aggregate job creation and job destruction rates we find that the net gain of the foreign sector in Irish manufacturing employment was due to a considerably lower rate of job destruction and a slightly higher job creation rate. An econometric investigation into the determinants of net employment growth at the plant level lends further credence to the argument that foreign plants performed better than domestic plants. Even after controlling for a number of plant and sector specific effects, multinationals experienced greater net employment growth rates than their indigenous counterparts.