Suppliers of Multinationals and the Forced Linkage Effect: Evidence from Firm Level Data

Olivier Godart and Holger Görg

No 7173, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using information on more than 1000 firms in a number of emerging countries, we find quantitative evidence that suppliers of multinationals that are pressured by their customers to reduce production costs or develop new products have higher productivity growth than other firms, including other host country suppliers of multinationals. These findings provide first empirical support for a "forced linkage effect" from supplying multinational companies. Our findings hold controlling for other factors within and outside the supplier-customer relationship and when endogeneity concerns are taken into consideration.

Keywords: productivity spillovers; backward linkages; multinational customers; suppliers; forced linkage (search for similar items in EconPapers)
JEL-codes: F23 O12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-01
New Economics Papers: this item is included in nep-bec and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Published - published in: Journal of Economic Behavior and Organization, 2013, 94, 393-404

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Related works:
Chapter: Suppliers of multinationals and the forced linkage effect: Evidence from firm level data (2016)
Journal Article: Suppliers of multinationals and the forced linkage effect: Evidence from firm level data (2013)
Working Paper: Suppliers of multinationals and the forced linkage effect: Evidence from firm level data (2013)
Working Paper: Suppliers of multinationals and the forced linkage effect: Evidence from firm level data (2013)
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