Multinational firms and export performance in developing countries: Some analytical issues and new empirical evidence

In a given developing-country environment, are the affiliates of MNEs more export oriented than wholly domestic-owned firms? No clear conclusions emerge from the theoretical models or the few available empirical studies of this issue. This paper draws attention to methodological flaws of these studies and presents new empirical evidence through the application of a more appropriate econometric procedure to data from Sri Lanka. We find no significant relationship between MNE affiliation and the degree of export orientation of exporting firms. On the other hand, there is evidence that multinational affiliation is an important determinant of whether a firm is an exporter or not.