Spillovers from foreign direct investment and firm growth: technological, financial and market structure effects
Sophia Dimelis ()
International Journal of the Economics of Business, 2005, vol. 12, issue 1, 85-104
This article examines spillover effects from inward investment on domestic firm growth in the case of a developed host country. The emphasis is placed on the role of the technological gap between domestic and foreign firms in identifying the importance of technology diffusion from the presence of multinationals. An augmented production function is employed to account for technological, financial and market structure effects. Based on a sample of 2589 manufacturing firms operating in Greece between 1992 and 1997, the analysis provides evidence that the significance of spillovers varies with the relative technological position of domestic firms and is higher in the middle and upper quantiles of the growth distribution. It was estimated that a unit increase in the foreign presence in Greek industry raises output growth by 7% on average, in a five-year period, after controlling for technological differences among firms. This result is consistent with the 'absorptive capacity' hypothesis that the technological capability of the host country relates positively to FDI spillover benefits.
Keywords: Foreign Direct Investment; Growth; Productivity; Spillovers; Technological Gap; Absorptive capacity; JEL Classification: F23; O30 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:12:y:2005:i:1:p:85-104
Ordering information: This journal article can be ordered from
Access Statistics for this article
International Journal of the Economics of Business is currently edited by Eleanor Morgan
More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().