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- Publisher
- Wiley
- Copyright
- © The editors of the Scandinavian Journal of Economics 2009
- ISSN
- 0347-0520
- eISSN
- 1467-9442
- DOI
- 10.1111/j.1467-9442.2009.01583.x
- Publisher site
- See Article on Publisher Site
Abstract
This paper presents new evidence on foreign plants and their effects on a host industry. I test the predictions of a Melitz‐type model using a panel of domestic and foreign plants in the Chilean manufacturing sector. Foreign ownership is a strong predictor of plant productivity and size advantages. Moreover, productivity gains for a domestic incumbent are positively associated with foreign plants' presence in the same industry and region. I also find a positive correlation between foreign entry and exit of less productive domestic plants, but inconclusive evidence on the effects on productivity of new domestic plants.
Journal
The Scandinavian Journal of Economics – Wiley
Published: Dec 1, 2009