Catching-Up to Foreign Technology? Evidence on the "Veblen-Gerschenkron" Effect of Foreign Investments

Giovanni Peri ()
Authors registered in the RePEc Author Service: Dieter M. Urban ()

No 10893, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The presence of foreign multinational enterprises may benefit local economies. In particular, highly productive foreign-owned firms may promote technological catch-up of local firms. Such channel of spillovers is defined as "Veblen-Geschenkron" effect of Foreign Direct Investments and is analyzed in this article. Rather than the overall density of foreign-owned plants in a region or sector, it is their productivity advantage that determines the positive effect on domestic firms in geographical and technological proximity. We test this hypothesis using new firm-level data for German and Italian manufacturing firms during the 90's. We find evidence of a significant Veblen-Gerschenkron effect which is robust to different ways of measuring total factor productivity (TFP) of firms and to different empirical specifications.

JEL-codes: F23 O47 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-geo, nep-ifn and nep-ino
Date: 2004-11
Note: ITI
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Journal Article: Catching-up to foreign technology? Evidence on the "Veblen-Gerschenkron" effect of foreign investments (2006)
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