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Productivity, Ownership and National Chains: Evidence from the British Retail Sector
Applied Economics Quarterly, Vol. 55 (2009), Iss. 4 : pp. 313–334
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1Dolores Añón Higón, Department of Applied Economics II & ERI-CES, Universidad de Valencia, Avda. de los Naranjos s / n, 46022 Valencia (Spain).
Abstract
This paper investigates factors explaining firms' productivity differences in the British retail sector. In particular, using simultaneous quantile regressions, it aims to uncover performance gaps stemming from foreign ownership and multinationality, as well as national scale economies. The findings suggest that foreign ownership weakly explains differences in performance across retailers. Only when firms in the upper quantiles of the TFP distribution are compared, the role of foreign ownership gains statistical significance, although with exceptions. In addition, firms able to expand their infrastructure across Great Britain possess a productivity advantage over more local retailers. This implies that the existence of a national network of stores (national scale economies) may be more important than the origin of ownership in explaining performance gaps in retailing.
JEL Classifications: D24, F23, L25, L81