Foreign Direct Investment, Technology Transfer and Productivity Growth. Empirical Evidence for Hungary, Poland, Romania, Bulgaria and the Czech Republic

Elvisa Torlak

No 331189, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Many governments offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits. Foreign direct investment (FDI) is generally perceived as the best channel for technology transfer, not only across national boundaries but also between firms – in particular, between foreign and domestic companies. This paper tests this hypothesis for five transition countries in Eastern Europe using panel data on more than 8000 plants in the Czech Republic, Poland, Hungary, Romania and Bulgaria. In a log-linear model, the Cobb-Douglas production function is estimated to examine the productivity effect of: (a) foreign ownership in firms, and (b) foreign presence in industries and regions. In the first case, regression coefficients indicate a positive correlation between foreign equity participation and plant productivity. In the second case, the impact of foreign investment on productivity of domestically owned firms turns out to be either negative or insignificant. Thus, the study corroborates the hypothesis that technology is transferred internationally through multinational companies, but provides no evidence of diffusion of technology from foreign to domestic firms.

Keywords: Research and Development/Tech Change/Emerging Technologies; Productivity Analysis (search for similar items in EconPapers)
Pages: 22
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/331189/files/1496.pdf (application/pdf)

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:ags:pugtwp:331189

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().