BORDER REGIMES AND INDIRECT PRODUCTIVITY EFFECTS FROM FOREIGN DIRECT INVESTMENT

Bruno Merlevede and Victoria Purice (victoria.purice@ugent.be)
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Victoria Purice: -

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

Abstract: Supplying inputs to foreign affiliates is consistently found to be an important source of productivity gains for domestic firms. We analyse the impact of border regimes on the existence and size of cross-border indirect productivity effects, exploiting variation in the pace and extent of European integration of seven Central and Eastern European countries and their neighbours during the period 2000-2010. EU-membership is a necessary condition for positive cross-border indirect productivity effects through backward linkages. Schengen area participation further magnifies cross-border effects. Our results bear testimony to the successful EU integration of CEECs and warn about potential productivity costs to local firms should border restrictions be reinstated.

Keywords: Banking; FDI, Productivity, Spillovers, Borders (search for similar items in EconPapers)
JEL-codes: D24 F2 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2019-03
New Economics Papers: this item is included in nep-eff, nep-eur and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:19/965

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