The performance of transnational corporations: Evidence for the manufacturing industry in Chile

This article analyses the performance of transnational corporations in Chilean
manufacturing industry. The findings show that while the productivity of subsidiaries
of foreign-owned firms is higher than that of local firms, the same is not true of
productivity growth. They also show that there are no significant differences in
market survival rates between transnational corporations and local firms. However,
firms under mainly foreign ownership that are small and have low productivity are
more likely to exit the market, displaying more footloose behaviour than their local
counterparts. This is associated with lower levels of profitability for this group of
transnational firms. Lastly, the findings suggest that transnational corporations are not
always more profitable than local firms. Furthermore, they seem able to exploit their
advantages over the latter only in the higher quantiles of the profitability distribution.