Indirect productivity effects from foreign direct investment and multinational firm heterogeneity

Karolien Lenaerts () and Bruno Merlevede
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Karolien Lenaerts: Ghent University

Review of World Economics (Weltwirtschaftliches Archiv), 2018, vol. 154, issue 2, No 7, 377-400

Abstract: Abstract This paper analyzes for a panel of Romanian manufacturing firms whether the quality of foreign firms, measured by their productivity level, affects their potential as a source of indirect productivity effects on domestic firms. We find that only sufficiently productive foreign firms generate positive productivity effects on domestic supplier firms. The most productive foreign firms are the main source of productivity effects. Domestic firms with higher productivity levels also enjoy larger total positive productivity effects. When supplying foreign firms that are less productive than themselves, domestic firms experience zero to negative effects.

Keywords: FDI spillovers; Multinationals; Firm heterogeneity; Technology transfer (search for similar items in EconPapers)
JEL-codes: F2 O3 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s10290-017-0298-9

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