GEP Research Paper 07/31
Multinationals and plant survival in Swedish manufacturing
Roger Bandick
Summary
This paper analyzes the survival differences between plants of MNE and non-MNEs in Swedish manufacturing during the 1990s. Results show that foreign MNE and exporting non-MNE plants have the highest survival rate while Swedish MNE plants have the lowest.
Abstract
Are multinational enterprises, MNEs, more likely than non-MNEs to close down their plants due to their footloose character? The results from using a panel of all Swedish manufacturing plants over the period 1993 and 2002 suggest that MNE plants, in particular Swedish MNE plants, have a higher probability of exiting the market than non-MNE plants. The outcome is robust controlling for other variables affecting the survival rates. Among non-MNE plants, the probabilities of exit are higher in non-exporting firms than in exporting firms. Moreover, the increased foreign presence in Swedish manufacturing seems to have led to higher exit rates of plants in non-exporting non-MNEs while plants of globally engaged indigenous firms appear to have been unaffected by the increased foreign presence.
Issued in October 2007
This paper is available in PDF format .