The paper investigates whether multinational corporations (MNCs) operating in Portugal and Greece perform differently than domestic firms. Departures from normality of firms’ profitability motivated the use of quantile regression. The results suggest that ownership ties do not make a significant difference with respect to performance of firms in Portugal. Results are similar for firms in Greece. Only when firms in the upper quantiles of gross profits are compared, MNCs are found to significantly perform better than domestic firms. MNCs have to compensate for their liability of foreigness that in spite of their technological advantages they cannot persistently outperform domestic rivals. Copyright Springer 2005Manufacturing industry, quantile regression, multinational corporations, profitability,

The literature on institutions and economic growth has showed that different institutions or policy designs affects productivity growth and international R&D spillovers. By changing the level of competition and/or affecting resources allocation, institutions can have a significant impact on firms' incentives to innovation. In this paper we test whether the existing institutional variation among European countries explains differences in innovation intensity. Our findings show that stronger regulation in the product market and greater protection of property rights favour innovation activity across Europe, whereas rigidity in the labor market affects negatively firms' incentives to innovate. These results highlight the importance of institutions in shaping innovation, thereby providing a contribution to the design of economic policy.

This paper investigates whether foreign firms had a positive impact on entrepreneurial activity measured by the net creation of firms. Using firm-level panel data for the Portuguese manufacturing and service industries over the period 1986 to 2000, we test whether the impact of foreign firms on firms' entry depends on the number and size of previous foreign entrants. Overall, the results cast some doubts on the influence of foreign firms in assisting entrepreneurial activity. The impact of a first foreign investment is, in general, positive but the marginal impact of additional investments appears to be negative.

D Do oe es s v ve en nt tu ur re e c ca ap pi it ta al l r re ea al ll ly y f fo os st te er r i in nn no ov va at ti io on n? ?" " A An na a P Pa au ul la a F Fa ar ri ia a N Na at tá ál li ia a B Ba ar rb bo os sa a NIPE WP 03/ 2013 " "D Do oe es s v ve en nt tu ur re e c ca ap pi it ta al l r re ea al ll ly y f fo os st te er r i in nn no ov va at ti io on n? ?" " A An na a P Pa au ul la a F Fa ar ri ia a N Na at tá ál li ia a B Ba ar rb bo os sa a N NI IP PE E *

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This paper analyses the patterns of firm growth of manufacturing firms across Portuguese regions. In particular, we compare firm size and growth in order to investigate 1) whether region-specific characteristics, interpreted as generating localization economies, exert any influence on firm growth and size, and 2) whether there is evidence of persistence in firm growth across regions. Using an extensive dataset of Portuguese manufacturing firms and applying parametric and semi-parametric approaches, we found that, in eleven of the eighteen analyzed regions, firm growth is related to firm size and therefore firms have no equal probabilities of attaining a particular growth rate within any given period. Moreover, the results uncovered that firms experience serial correlation in their growth patterns in all regions and region-specific characteristics, such as industrial diversity, entrepreneurship potential, and workforce qualities, engender differences in the way firms grow. Thus, this paper adds to the literature by showing how geographic location matters to firm size and growth.g row_547 125..158

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