Foreign Direct Investment, Information Spillover, and Export Decision: The Concentric-Circle Model with Application to Hungarian Firm-Level Data

Ichiro Iwasaki, 一郎 岩﨑, イチロウ イワサキ, Péter Csizmadia, Miklós Illéssy, Csaba Makó and Miklós Szanyi

No a527, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: In this paper, we empirically examine the impact of foreign direct investment (FDI) on the export decision of domestic firms using large-scale panel data from Hungary. In comparison with the conventional model that expresses the export propensity of multinational enterprises (MNEs) with a single variable, the concentric-circle model, considering the nested structure of industrial classification, more precisely specifies the source, extent, and direction of information spillovers from MNEs to indigenous firms. We also confirmed the close relationship between the information spillover effect and the heterogeneity of FDI and domestic firms.

Keywords: FDI; information spillover; export decision; concentric-circle model; Hungary (search for similar items in EconPapers)
JEL-codes: F14 F21 F23 L16 L60 L80 O19 P23 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-int and nep-tra
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Citations: View citations in EconPapers (2)

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