GEP Research Paper 00/12
Multinational Companies, Technology Spillovers and Firm Survival: Evidence from Irish Manufacturing
Holger Görg and Eric Strobl
This paper was subsequently published in the Scandinavian Journal of Economics , Vol. 105, No. 4, 2003 (new title: Multinational companies, technology spillovers and plant survival)
Abstract
This paper examines the effect of the presence of multinational companies on firm survival in the host country. We postulate that MNCs can impact positively on firm survival through technology spillovers, and negatively through the crowding out of rivals. We study the nature of the effect of multinationals using a Cox proportional hazard model which we estimate using firm level data for Irish manufacturing industries. Our results show that, controlling for other firm and sector-specific effects, the presence of multinationals has a life enhancing effect on indigenous firms in high tech industries, suggesting the presence of technology spillovers. We do not find any effect of MNC presence on indigenous low tech firms, however. We also discover that there are negative effects of the presence of MNCs on the survival of foreign firms in low tech sectors, while there is no evidence of an effect from the presence of multinationals on the survival of foreign high tech firms.
Issued in May 2000.
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