IDEAS home Printed from https://ideas.repec.org/p/ifs/ifsewp/99-11.html
   My bibliography  Save this paper

Productivity and foreign ownership in the UK car industry

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

Abstract

Many sectors of the UK economy experienced rapid productivity growth over the 1980's. This coincided with an increase in the flow of inward investment. Studies using macro data have linked these two events. This paper investigates what has happened in one industry at the microeconomic level and asks whether foreign-owned establishments in the UK car industry more productive than domestic-owned ones. Production functions are estimated using a new panel data set at the plant level. The findings suggest that, while foreign-owned establishments have higher output and value-added per worker, these differences appear to be largely explained by different levels of factor usage. Foreign-owned firms invest more in physical capital and use more intermediate goods. They also pay their workers higher wages. Differences in levels of total factor productivity still exist but they are relatively small.

Suggested Citation

  • Rachel Griffith, 1999. "Productivity and foreign ownership in the UK car industry," IFS Working Papers W99/11, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:99/11
    as

    Download full text from publisher

    File URL: http://www.ifs.org.uk/wps/wp9911.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dirk Willem Te Velde, 2002. "Foreign Ownership and Wages in British Establishments," The Economic and Social Review, Economic and Social Studies, vol. 33(1), pages 101-108.
    2. Christian Bellak, 2001. "Multinational Enterprises and Their Domestic Counterparts: Past Research, Current Issues and Future Directions," Working Papers geewp18, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    3. Behera, Smruti Ranjan Behera & Dua, Pami Dua & Goldar, Bishwanath Goldar, 2012. "Horizontal and Vertical Technology Spillover of Foreign Direct Investment: An Evaluation across Indian Manufacturing Industries," MPRA Paper 43293, University Library of Munich, Germany.
    4. David Greenaway & Alessandra Guariglia & Zhihong Yu, 2014. "The more the better? Foreign ownership and corporate performance in China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 681-702, September.
    5. Christian Bellak, 2004. "How Domestic and Foreign Firms Differ and Why Does it Matter?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 483-514, September.
    6. Ali-Yrkkö, Jyrki & Ylä-Anttila, Pekka, 2001. "Globalisation of Business in a Small Country - Does Ownership Matter?," Discussion Papers 779, The Research Institute of the Finnish Economy.
    7. Frank Barry & Adele Bergin, 2010. "Ireland’s Inward FDI over the Recession and Beyond," The Institute for International Integration Studies Discussion Paper Series iiisdp321, IIIS.
    8. Sourafel Girma & David Greenaway & Katharine Wakelin, 2013. "Who Benefits from Foreign Direct Investment in the UK?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 560-574, November.
    9. László Tőkés, 2019. "The Effect of Foreign Direct Investment on Firm Labor Productivity: Does the Country of Origin of the FDI Matter?," Society and Economy, Akadémiai Kiadó, Hungary, vol. 41(2), pages 227-243, June.
    10. Benfratello, Luigi & Sembenelli, Alessandro, 2006. "Foreign ownership and productivity: Is the direction of causality so obvious?," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 733-751, July.
    11. Smruti Ranjan Behera, 2015. "Do Domestic Firms Really Benefit From Foreign Direct Investment? The Role Of Horizontal And Vertical Spillovers And Absorptive Capacity," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(2), pages 57-86, June.
    12. Elif Bascavusoglu-Moreau & Qian Cher Li, 2013. "Knowledge Spillovers & Sources of Knowledge in the Manufacturing Sector: Literature Review & Empirical Evidence for the UK," Working Papers wp451, Centre for Business Research, University of Cambridge.
    13. Añón Higón, Dolores & Manjón Antolín, Miguel, 2012. "Multinationality, foreignness and institutional distance in the relation between R&D and productivity," Research Policy, Elsevier, vol. 41(3), pages 592-601.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:99/11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emma Hyman (email available below). General contact details of provider: https://edirc.repec.org/data/ifsssuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.