GEP Research Paper 06/16
The market disciplining effects of FDI: Does the mode of entry matter?
Sara Maioli, Ben Ferrett, Sourafel Girma and Holger Görg
Abstract
We investigate both theoretically and empirically the competitive discipline effect exerted by FDI on plant-level price-cost margins. Using plant level data for manufacturing industries in the United Kingdom we find robust evidence supporting our theoretical predictions: greenfield FDI has a discipline effect on margins, whilst acquisition FDI increases price-cost margins.
Issued in June 2006.
This paper is available in PDF format .