Distance, Time since Foreign Entry, and Knowledge Spillovers from Foreign Direct Investment

Bruno Merlevede and Victoria Purice ()

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: This paper investigates the effect of foreign direct investment on the productivity of local firms. We decompose traditional country-wide spillover measures in different components according to both distance between foreign and domestic firms and timesince- foreign-entry. We find larger and faster spillover effects for local suppliers of foreign firms at shorter distance, driven mainly by recent foreign entrants. Irrespective of distance, foreign firms of medium maturity generate backward spillover effects that fade away with longer presence. A positive effect on local competitors is not significantly affected by distance and requires the presence of mature foreign firms.

Keywords: FDI; Spillovers; Dynamics; Timing; Regions; Distance (search for similar items in EconPapers)
JEL-codes: D24 F2 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2014-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-int, nep-knm, nep-mfd, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:14/896

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