This paper analyses the impact of foreign multinationals on the start-up size ofdomestic entrants in Irish manufacturing industries. We use the regression quantileestimator, which allows us to take account of the heterogeneity of entrants' start-upsize. Estimation results show that the presence of foreign multinationals in a sectorimpacts negatively on the start-up size of domestic entrants of all sizes in modernsectors and on the start-up size of large domestic entrants in traditional sectors. Thisnegative effect may be attributed to competition of domestic plants with foreignmultinationals and other domestic plants in the final goods and/or the intermediategoods market.
Review of Industrial Organization – Springer Journals
Published: Oct 13, 2004
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