Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286797 
Year of Publication: 
2021
Citation: 
[Journal:] Review of World Economics [ISSN:] 1610-2886 [Volume:] 157 [Issue:] 4 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2021 [Pages:] 703-726
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
Multi-unit firms have productivity advantages over competitors because of their use of a non-rival asset—firm-specific knowledge—in several units. Using knowledge-intensive services leads to economies of scope in production by multi-unit firms. Such headquarter are usually supplied by parent companies and serve to link different firm units. Headquarter services are difficult to quantify in statistics or surveys, except when they cross-borders and the exchange of services between MNEs and their offshore subsidiaries becomes apparent. This study therefore focuses on IT service imports to explain productivity differences among foreign affiliates of multinational firms in Germany. The authors base the analysis on the population of foreign multinational firms active in Germany and analyze what effect the import of IT services has on their productivity. They find that IT headquarter service flows have significant impacts on foreign affiliates’ productivity in general and US affiliates in particular. As the average IT-service flows (per firm and partner) from parent countries are significantly higher for US affiliates than non-US affiliates, they conclude that the import of IT services from the parent-company is a source of the productivity advantages of US affiliates in Germany.
Subjects: 
Cross-border service flows
Multinational enterprises
Micro-level productivity analysis
JEL: 
L14
F34
G21
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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