Foreign direct investment spillovers: additional lessons from a country study

Renato Flôres Junior, Maria Paula Fontoura and Rogério Guerra Santos

No 455, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: We investigate the impact of foreign direct investment on the productivity of domestic firms, using sectoral data for Portugal. An improved analysis takes into account the most appropriate interval for the technological gap between foreign and domestic firms. Sectoral variation of spillovers, idiosyncratic sectoral factors and the search for inter-sectoral effects provide new insights on the subject. Significant spillovers require a proper technology differential between the foreign and domestic producers and favourable sectoral characteristics. Broadly, they occur in modern industries in which foreign firms have a clear, but not too sharp, edge on the domestic ones. Agglomeration effects are also identified as pertinent specific influences.

Date: 2002-09-01
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:455

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