Helen Louri

Location and Survival of New Entry

Drawing from two different strands of literature, industrial ecology and spatial analysis, the paper attempts to examine the role that location plays in determining firm survival. A time-varying covariates hazard model is used on Greek firms, which enter manufacturing in the early 1980s and are followed up to 1992. Location in Greater Athens vs. the rest of the country affects survival positively, especially when smaller firms are concerned. Other firm variables such as current size, profitability, leverage and capital together with growth and industry contestability are also found to affect survival, which becomes more difficult for firms established closer to recessions.

Efficiency Spillovers from Foreign Direct Investment in the EU Periphery: A Comparative study of Greece, Ireland and Spain*

Despite a growing number of empirical studies on efficiency spillovers arising from the presence of multinational firms for a number of countries, general conclusions on this issue have been inhibited by differences in the data sets and estimation techniques used across studies. In this paper we conduct a comparative empirical study for Greece, Ireland and Spain by creating comparable data sets and estimating identical models. Our results show evidence of spillovers in Ireland and Spain only, although these positive spillovers seem to depend on whether firms have the absorptive capacity to capture technological spillovers and the criteria used to classify them as foreign affiliates. JEL no. F23, O30

On the determinants of multinationals' ownership preferences: evidence from Greece and Portugal

Abstract The aim of the paper is to examine the determinants of the ownership preferences of manufacturing multinational firms established in Greece and Portugal in the 1990s. Differences between the two countries in terms of relative FDI size, industry and ownership choices are observed. Transaction cost arguments together with bargaining power considerations through their effects on the affiliate’s expected profits provide the theoretical basis for the econometric model which uses multinomial logit analysis on Greek and Portuguese data. The estimations contribute to a better understanding of observed differences, showing that firm and industry characteristics interacting with location affect ownership decisions.

Foreign direct investment and technology spillovers: Which firms really benefit?

Foreign direct investment is thought to contribute to host economies by increasing their efficiency either directly or through technology diffusion. Such efficiency benefits are neither equally produced by foreign firms nor equally distributed to all domestic firms. The special question addressed in this study is related to how differentiated such effects are depending on size and degree of (foreign) ownership. Based on a sample of 3,742 manufacturing firms operating in Greece in 1997, it is found that, while it is large, majority-held foreign firms that exhibit higher productivity, spillovers are important for small domestic firms and stem mostly from small joint ventures where the foreign partner owns a minor part of equity. JEL no. F23, O30

Firms as Portfolios: A Mean-Variance Analysis of Unquoted UK Companies

This paper adopts a mean-variance portfolio framework to model the balance sheet behavior of unquoted companies with respect to choice items such as fixed investment, investment in stocks, trade credit, and borrowing. Econometric results for a sample of thirty-nine U.K. firms are consistent with many of the restrictions implied by portfolio theory, in particular that these balance sheet items are jointly determined. Copyright 1989 by Blackwell Publishing Ltd.

Foreign Investment and Ownership Structure: An Empirical Analysis

An important decision that multinational firms (MNFs) face when expandingabroad concerns the specific form of their investment. The usual choice is betweenexports, licensing or franchising, and foreign production. In recent years, followingthe globalisation trend in the world economy, all modes of foreign expansion aremet with increasing frequency. Among them, foreign direct investment (FDI) hasbecome the most popular strategy. Barrell and Pain (1997) report that the number ofMNFs has increased threefold since the 1980s, pushing the ratio of aggregate FDIstock to GDP in OECD economies from 4.7% in 1975 to over 10% in 1995. In thesame year, the value of foreign affiliates’ sales exceeded the value of world exportsby around one quarter. Because of its importance in international development, FDIalong with its determinants has been the subject of extensive research.

Entry through Acquisition: Determinants of Multinational Firm Choices

This paper examines the factors that determine the decision of multinational firms to enter a foreign market through acquisition. In addition to the traditional industry variables attracting or discouraging entry through their effects on expected returns, the relative size of multinational entry in Greece in 1987–96 is found to be affected by a new group of variables, shaping rational profit expectations and characterizing the target, the industry and the origin of the buyer. A better understanding of the decision to enter a market through acquisition instead of greenfield investment and of its possible consequences is thus provided.

Inventory investment in Greek manufacturing industry: Effects from participation in the European market

Abstract The aim of this paper is to examine the factors affecting inventory investment in Greek manufacturing industry in 1958–92. Specific attention is paid to the 1981 accession of Greece to the EC and the way it changed inventory behaviour by causing a downward shift to inventory investment and by reducing the role of monetary policy (interest rates and exchange rate fluctuations included) found to be important in an earlier period. EC accession could improve the stability of the economy through the inventory channel also.

Demands for short-term assets and liabilities by UK quoted companies

The demands for short-term assets and liabilities of UK quoted firms are explored within a theoretical framework borrowed from portfolio theory, and tested with data from two samples of firms, one of large fast-growing firms and the other of smaller slow-growing firms. The results suggest that the model is able to capture the interaction between firm decisions on short-term borrowing, trade debt and trade credit, and on the desired level of cash assets. But there are significant differences in the parameters of the equation system between the two samples.

Bank Lending Margins in the Euro Area: The Effects of Financial Fragmentation and ECB Policies

In the present paper we study the determinants of the margins paid by euro-area non-financial corporations (NFCs) for their bank loans on top of the rates they earn for their deposits (bank lending margins). We use panel VAR techniques, in order to test for causality relationships and produce impulse response functions for eleven euro-area countries from 2003:1 to 2014:12. The countries are separated into two groups (distressed and non-distressed), in order to examine for heterogeneities in the relationships between lending margins; the period is also separated with reference to the peak of the global financial crisis (before and after the collapse of Lehman in September 2008). We find that significant heterogeneities existed even before the global financial crisis and remained in its aftermath, although the magnitude and the direction of the effects exercised by the explanatory variables have changed. Furthermore, apart from finding that market concentration and the prudence of banks’ management increase the lending margins NFCs pay for their loans, there is evidence of substitution effects between financing obtained from banks and corporate bond markets. The provision of ample liquidity from the ECB, in the aftermath of the global financial crisis was found to be effective only for the core countries, suggesting that further policy actions are needed in order to reduce the fragmentation of bank lending and promote financial integration to the benefit of the euro-area real economy.