147
real support.I'(Ibid, p. 286.) In the same studies both Horst and Caves repeat the analysis on U.K. industry data and obtain broad confirmation of the Canadian results. Caves' dismissa1 of his "rival" hypothesis is questionable on the basis of the results he presents. But more than that, one may question whether an advantage based on human capital intensity is necessarily different from one based on R&D and advertising intensity. Either one may be expected to be related to the creation of "intangib1e capital". In any case, his conc1usion regarding the role of ski11 intensity in explaining U.S. foreign investment is not borne out for Swedish foreign investors. The positive relationship between the dominance of multiplant firms in an industry and the share of the U.S. industry in Canadian manufacturing says more, one would think, about industry characteristics affecting location than it does about the nature of the industry's competitive advantage. We will return to the question of the relationship between firm size and foreign manufacturing in
t~e
next chapter, however.
Samuelsson, in his study of foreign manufacturihg investment in Sweden, re1ates the production shares of foreign owned firms in 120 industries to Swedish industry charactertstics. He finds that the competitive advantage of foreign owned firms i,n Sweden depended positively on techhical personne1 intensity and advertising intensi,ty, both intended as measures of a know-how advantage and both high1y significant, and, less decisively, Oh physica1 capital intensity. The presenee of large Swedish multinational firms in an industry, represented by a dummy, had a negative effect on the relative size of the foreign presence.