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Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal

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  • Natália Barbosa
  • Helen Louri

Abstract

The paper investigates whether multinational corporations (MNCs) operating in Portugal and Greece perform differently than domestic firms. Departures from normality of firms’ profitability motivated the use of quantile regression. The results suggest that ownership ties do not make a significant difference with respect to performance of firms in Portugal. Results are similar for firms in Greece. Only when firms in the upper quantiles of gross profits are compared, MNCs are found to significantly perform better than domestic firms. MNCs have to compensate for their liability of foreigness that in spite of their technological advantages they cannot persistently outperform domestic rivals. Copyright Springer 2005

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  • Natália Barbosa & Helen Louri, 2005. "Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(1), pages 73-102, August.
    • Handle: RePEc:kap:revind:v:27:y:2005:i:1:p:73-102
    DOI: 10.1007/s11151-005-4920-y
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    More about this item

    Keywords

    Manufacturing industry; quantile regression; multinational corporations; profitability;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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