Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal

Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms... The paper investigates whether multinational corporations (MNCs) operating in Portugal and Greece perform differently than domestic firms. Departures from normality of firms’ profitability motivated the use of quantile regression. The results suggest that ownership ties do not make a significant difference with respect to performance of firms in Portugal. Results are similar for firms in Greece. Only when firms in the upper quantiles of gross profits are compared, MNCs are found to significantly perform better than domestic firms. MNCs have to compensate for their liability of foreigness that in spite of their technological advantages they cannot persistently outperform domestic rivals. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2005 by Springer
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-005-4920-y
Publisher site
See Article on Publisher Site

Abstract

The paper investigates whether multinational corporations (MNCs) operating in Portugal and Greece perform differently than domestic firms. Departures from normality of firms’ profitability motivated the use of quantile regression. The results suggest that ownership ties do not make a significant difference with respect to performance of firms in Portugal. Results are similar for firms in Greece. Only when firms in the upper quantiles of gross profits are compared, MNCs are found to significantly perform better than domestic firms. MNCs have to compensate for their liability of foreigness that in spite of their technological advantages they cannot persistently outperform domestic rivals.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Apr 5, 2005

References

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