Firm size and spillover effects from foreign direct investment: the case of Romania

Karolien Lenaerts () and Bruno Merlevede

Small Business Economics, 2015, vol. 45, issue 3, 595-611

Abstract: This paper introduces firm size in the analysis of the productivity spillovers of foreign direct investment. Our analysis of a panel of Romanian firms reveals two main findings: only medium-sized foreign firms generate spillovers, and domestic firms’ size is of limited importance to identify which firms absorb spillovers. To explain these findings, we show that large foreign firms are less embedded in the domestic economy because they are more likely to bring their own suppliers, import intermediate inputs and export their output. Smaller foreign firms lack the scale to transmit spillovers to domestic firms. Whereas foreign firms’ size adequately proxies for these spillover mechanisms, domestic firms’ size has an unclear relationship with the different mechanisms. Copyright Springer Science+Business Media New York 2015

Keywords: Foreign direct investment; Spillovers; Firm size; Supply chain; F2; D24; L23; L25; L26 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11187-015-9652-2 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:45:y:2015:i:3:p:595-611

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-015-9652-2

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().