Article

 

Productivity Growth and Functional Upgrading in Foreign Subsidiaries in the Slovenian Manufacturing Sector (p.73-100)

by

Jaklič Andreja, University of Ljubljana

Majcen Boris, Institute for Economic Research (Ljubljana)

Radošević Slavo, University College London, School of Slavonic and East European Studies

Rojec Matija, University of Ljubljana and Institute of Macroeconomic Analysis and Development (Ljubljana)

Keywords : Foreign subsidiaries, Slovenia, productivity, functional upgrading, control pattern

JEL classification : D20, F20, L20, O40

Abstract

The paper discusses the determinants of productivity growth in manufacturing foreign subsidiaries in Slovenia. Special attention is given to the impact of control pattern. We show that productivity growth is significantly and positively correlated with the level of foreign parent companies' control of marketing and strategic business functions. Larger subsidiaries and subsidiaries with higher exports to sales ratio also experience higher changes in the productivity level. Subsidiaries in high technology intensity sectors exhibit significantly lower change in productivity than subsidiaries in other sectors.