ABSTRACT

This chapter focuses on the survival of foreign-owned plants. Plant survival is seen as a critical issue for the regional development, as exit rates that are much higher than for domestic plants. In the case of foreign-owned start-up plants arriving in the North-East region since the mid-1980s, a fifth exited by the year 2000, taking with them 7,500 jobs. The analysis is for New Plants that carry out at least one further investment project after the investment by which they commence in foreign ownership. A robust estimator is used, as while the linear probability model is relatively easy to interpret, it may induce heteroskedasticity in the error term. The results for start-up plants are similar to those for New Plants, but overall the results are disappointing. One possible reason for this is that the linear probability model is giving far too simplistic an explanation, so that a logit model may be preferred.