Global Links: Multinationals, Foreign Ownership and Productivity Growth in Canadian Manufacturing
Issue informationThis paper examines two potential benefits of foreign-controlled plants in the Canadian manufacturing sector: the superior performance of foreign-controlled plants and their productivity spillovers to domestic plants. The paper finds that foreign-controlled plants are more productive, more innovative, more technology intensive, pay higher wages and use more skilled workers. This foreign-ownership advantage is found to be a multinational advantage. What matters for economic performance is whether plants belong to multinational enterprises (MNEs) rather than ownership per se. Canadian multinationals are as productive as foreign multinationals. We also find that MNEs have accounted for a disproportionately large share of productivity growth in the last two decades. Finally, we find robust evidence for productivity spillovers from foreign-controlled plants to domestic-controlled plants arising from increased competition and greater use of new technologies among domestic plants.
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|Product:||The Canadian Economy in Transition|
|Latest issue:||no. 9||Free|
|Release date:||December 5, 2005|
|Authors:||Baldwin, John R.|
|Subscription:||one year (365 days)||N/A|
|System requirements:||Internet browser. Adobe Acrobat reader is required to view and print files in PDF format.|
analytical products, domestic control, foreign corporations, free trade, innovation, labour productivity, multinational enterprises, productivity growth, research and development, salaries and wages, technological innovations.
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