Foreign Plants and Industry Productivity: Evidence from Chile |
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| Authors: | Natalia Ramondo |
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| Institution: | 1. University of Texas, Austin, TX 78712, USAnramondo@mail.utexas.edu;2. I would like to thank for their comments Fernando Alvarez, Robert Lucas, Daniel Paravisini, Ronni Pavan, Andrés Rodríguez‐Clare, Robert Shimer, Nancy Stokey, Chad Syverson, Sergio Urzua, as well as participants at seminars at the University of Chicago. I also thank two anonymous referees for their helpful suggestions. All remaining errors are mine. |
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| 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. |
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| Keywords: | Multinational firms plant turnover spillovers F23 |
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