Productivity Spillovers from Competition between Local Firms and Foreign Affiliates

Magnus Blomstrom, Ari Kokko and Mario Zejan

Chapter 12 in Foreign Direct Investment, 2000, pp 187-202 from Palgrave Macmillan

Abstract: Abstract In the debate on the role of multinational corporations in international technology transfer, it has often been suggested that a large share of the host countries’ benefits from foreign direct investment may come in the form of external effects or ‘spillovers’. MNCs may, for example, introduce new technologies that are imitated by local producers, or train workers whose specific skills spill over when they set up their own firms or are hired by existing local firms. These benefits can be characterized as effects of contagion and demonstration. Other effects are related to competition, and occur when local firms are forced to become more productive — by introducing new technologies or increasing X-efficiency — in order to survive in markets where foreign affiliates are present.

Keywords: Foreign Direct Investment; Local Firm; Labour Quality; Advertising Expenditure; Foreign Affiliate (search for similar items in EconPapers)
Date: 2000
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Journal Article: Productivity spillovers from competition between local firms and foreign affiliates (1996)
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DOI: 10.1057/9780230598614_12

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