Principal speaker
Professor Sara McGaughey
How should we define a firm as 'foreign' and/or 'domestic' in our complex globalising world? Large MNEs increasingly utilize detailed and complicated ownership structures that, in part, seek to hide direct ownership patterns for tax and financial reasons. Complexity in MNE structures is further driven by the increasing growth and fragmentation of production that results in MNEs constantly reconfiguring their international supply chains, and by modalities of growth such as mergers and acquisitions, joint ventures and alliances between firms. So, how prevalent are 'foreign' firms in local economies? How relevant is the traditional 10% threshold single foreign owner IMF definition when studying the presence and consequences of foreign direct investment? Is there a better way to categorise foreign and domestic firms, and how does this affect existing understandings (good and bad) of MNE activity?
Using a multi-country firm-level panel dataset we distinguish between foreign and domestic firms by using both the traditional IMF 10% direct foreign ownership definition and the control-based 50% ultimate foreign ownership definition. By comparing the two methods we find a large set of firms that are ‘foreign' according to the ultimate ownership definition but 'domestic' according to the direct ownership definition. These firms turn out to be the most productive of all firms in our data. The implications of such a mis-classification is highlighted through an analysis of FDI-induced productivity spillovers.
Professor Sara McGaughey's research in International Business is at the intersection of international strategy and entrepreneurship, and explores several themes related to knowledge and innovation, international new venturing and multinational enterprise. Current projects examine institutional entrepreneurship in international standards; subsidiary-headquarter relations through the lenses of sensemaking-sensegiving and structuration theory; network orchestration in global value chains; and corporate entrepreneurship, as reflected in her latest book - Fostering Local Entrepreneurship in a Multinational Enterprise - which explores corporate entrepreneuring with a division of Siemens AG. Sara's work has appeared in journals such as Academy of Management Review, Journal of World Business, Journal of Management Studies and Business History.
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