DP3765 Productivity Convergence and Foreign Ownership at the Establishment Level

Author(s): Rachel Griffith, Stephen J. Redding, Helen Simpson
Publication Date: February 2002
Keyword(s): competition, FDI, knowledge spillovers
JEL(s): F23, O33, O47
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3765

This Paper investigates whether there is convergence in Total Factor Productivity towards the technological frontier at the establishment level. We find convergence to the frontier is statistically and quantitatively important, suggesting the existence of technology spillovers. Foreign multinationals make up a significant proportion of establishments at the technological frontier, and therefore make a contribution to productivity growth through technology transfer. We also find evidence that increased foreign presence within an industry raises the speed of convergence to the technological frontier.