TY  - JOUR
AU  - Bernard,Andrew B.
AU  - Sjoholm,Fredrik
TI  - Foreign Owners and Plant Survival
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10039
PY  - 2003
Y2  - October 2003
UR  - http://www.nber.org/papers/w10039
L1  - http://www.nber.org/papers/w10039.pdf
N1  - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH  03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu

Fredrik Sjoholm
Research Institute of Industrial Economics
Box 55665
SE-102 15
Stockholm, Sweden
E-Mail: Fredrik.Sjoholm@ifn.se
AB  - In recent years, international capital flows of all types have increased dramatically and most governments have been actively encouraging inflows of direct investment. However, concerns remain that reliance on foreign multinationals may be a risky development strategy as foreign firms are likely to be less rooted in the local economy and may be quicker to close down production. This paper asks whether foreign owners are more likely to close plants than domestic owners. In Indonesia, plants with any foreign ownership are far less likely to close than wholly-owned domestic plants. However, the lower probability of shutdown is a result of the larger size of foreign plants rather than their nationality of ownership. Controlling for plant size and productivity, we find that foreign plants are significantly more likely to close than comparable domestic establishments.
ER  -