GEP Research Paper 00/11
Multinational Companies and the Development of Firm Start-Up Size: Evidence from Quantile Regressions for Ireland
Holger Görg and Eric Strobl
This paper was subsequently published in the Review of Industrial Organization, Vol. 20, No.1, 2002, pp.15-31.
Abstract
This paper analyses the impact of foreign multinationals on the development of start-up size of new entrants in Irish manufacturing industries over the period 1973 to 1996. We provide a theoretical rationale as to why we would expect an effect of multinationals on entrants' start-up size. In the empirical estimation we use the regression quantile estimator, which allows us to take account of the heterogeneity of firm start-up size. Our estimation results show that the presence of foreign multinationals in a sector impacts negatively on the start-up size of indigenous entrants. This latter effect may be attributed to competition of indigenous firms with foreign multinationals in the final goods market and/or with indigenous firms in the intermediate goods market.
Issued in May 2000.
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