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Concentration and Multinationality in European Manufacturing: What’s the Effect on Productivity?

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Abstract

Using the time comparable matrix data from Sleuwaegen and Veugelers (2001), this paper investigates the impact of concentration and intra-EU distribution of multinational production on productivity growth in European manufacturing. In line with previous research, our estimation results indicate that market structure is indeed an important determinant. Productivity growth is significantly reduced through increasing concentration, while it is increased in industries with growing competitive pressure, e.g. from import penetration. The increasing intra-EU dispersion of multinational production likewise fosters productivity growth: Multinational firms promote technological change and transfer their firm-specific assets across countries.

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Authors and Affiliations

  1. Department of Economics, Austrian Institute of Economic Research, University of Innsbruck, Universitaetsstrasse 15, 6020, Innsbruck, Austria

    Peter Egger & Michael Pfaffermayr

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  1. Peter Egger
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  2. Michael Pfaffermayr
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Correspondence to Michael Pfaffermayr.

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JEL codes: L11, F23

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Egger, P., Pfaffermayr, M. Concentration and Multinationality in European Manufacturing: What’s the Effect on Productivity?. Empirica 31, 325–332 (2004). https://doi.org/10.1007/s10663-004-1419-y

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  • DOI: https://doi.org/10.1007/s10663-004-1419-y

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