Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab

Abstract

This paper examines the relationship between foreign ownership and productivity, paying particular attention to two issues neglected in the existing literature -the role of multinationals in service sectors and the importance of R&D activity conducted by foreign multinationals. We review existing theoretical and empirical work, which largely focuses on manufacturing, before presenting new evidence using establishment-level data on production, service and R&D activity for the United Kingdom. We find that multin…