Foreign Ownership and Long-term Survival

Does foreign ownership enhance or decrease a firm's chances of survival? Over the 100 year period 1895-2005 this paper compares the survival of foreign subsidiaries in Denmark to a control sample of domestically owned companies matched by industry and firm size. We find evidence of a significant survival premium among foreign-owned companies, particularly for early entrants like Siemens, Philips, Kodak, Ford, or Goodyear, which have been active in the country for almost a century. On average exit risk for domestic companies is two times higher than for foreign companies. However, the foreign survival premium decreases over calendar time and disappears at the end of the century along with rapid growth in the number of foreign subsidiaries.