Firm Productivity and Foreign Direct Investment into Non-core Activities *
As foreign direct investment (FDI) often originates from multinational enterprises (MNEs) with non-core activities and not single-product firms, as MNE theory typically suggests, we hypothesize that such firms are more productive than MNEs without non-core activities as well as non-MNE firms. We test this hypothesis using Kolmogorov-Smirnov stochastic dominance Tests and Japanese firm-level productivity and FDI data for the period 1985-2001. We find that both manufacturing and service multinational firms with non-core foreign investments stochastically dominate firms without non-core activities. We also find cost-complementarities between certain core and non-core FDI activities that span both manufacturing and service affiliates. Copyright 2009 The Authors. Journal compilation 2009 East Asian Economic Association and Blackwell Publishing Ltd..
Year of publication: |
2009
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Authors: | Cieslik, Andrzej ; Ryan, Michael |
Published in: |
Asian Economic Journal. - East Asian Economic Association - EAEA. - Vol. 23.2009, 3, p. 297-321
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Publisher: |
East Asian Economic Association - EAEA |
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