Multinational Companies, Technology Spillovers, and Plant Survival

Abstract

This paper examines the effect of the presence of multinational companies on plant survival in the host country. We postulate that multinational companies can impact positively on plant survival through technology spillovers. We study the nature of the effect of multinationals using a Cox proportional hazard model which we estimate using plant level data for Irish manufacturing industries. Our results show that the presence of multinationals has a life enhancing effect only on indigenous plants in high tech industries, suggesting the presence of technology spillovers. In contrast, multinationals compete with each other in low tech sectors in the host country.