An Investigation into the Relationships Between Globalisation, Firm Structure, Productivity and Knowledge using UK Firm-level Data

This thesis is a micro-econometric investigation into the relationship between globalisation, productivity, knowledge and firm structure. It is composed of three main investigations using large panel datasets of UK firms. The datasets are created by combining the ARD, BERD, BSD. The AFDI is used to identify multinational status and FAME provides additional financial statistics. The first investigation aims to identify if differences exist between multinational and non-multinational firms in terms of productivity and knowledge and also if complementarities exist between internal and external knowledge. The data is analysed using a Cobb-Douglas production function including knowledge interaction terms with system GMM. The findings show that multinational firms are more productive than non-multinational firms and the main source of this arises from differences in the returns to capital. The study shows little evidence to support complementarities between internal and external knowledge. Secondly, it aims to understand the motivations behind firm restructuring events and if these motivations differ between foreign and UK-owned firms. This investigation uses a multinomial logit model to identify average characteristics of firms engaging in each type of event. The findings imply that managerial, synergistic and refocusing motivations for restructuring are present. Foreign firms may be motivated to engage in joining events by innovation synergies. The third aim is to determine the impact of firm restructuring events on productivity and innovation activity. The propensity score method is applied to obtain matched samples to estimate the treatment effect on the treated. The results show that restructuring events lead to an increase in productivity, but the findings for innovation activity are less conclusive.