How and By How Much does Foreign Direct Investment Increase the Productivity of Domestic Firms?

Bruno Merlevede and Koen Schoors

No 2008/39, Working Papers from Hogeschool-Universiteit Brussel, Faculteit Economie en Management

Abstract: We analyze productivity spillovers from MNC subsidiaries to domestic Romanian companies, both within (horizontal spillovers) and across industries (vertical spillovers). We separate labor market spillovers from other horizontal spillovers and define the supply-backward linkage spillover that runs from foreign investors over domestic suppliers to local users of domestic inputs. In our panel of Romanian firms, labor market effects differ from other horizontal effects, vertical spillovers dominate horizontal spillovers and the newly defined supply-backward spillover is economically and statistically significant. The spillovers studied raise total factor productivity between 20% and 50% in the period 1998-2001, depending on the firm’s initial level of technology.

Keywords: FDI; spillovers; absorptive capability; firm size; ownership structure (search for similar items in EconPapers)
JEL-codes: F2 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-09
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://lirias.hubrussel.be/handle/123456789/2237 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to lirias.hubrussel.be:80 (nodename nor servname provided, or not known)

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:hub:wpecon:200839

Access Statistics for this paper

More papers in Working Papers from Hogeschool-Universiteit Brussel, Faculteit Economie en Management Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Janssens ( this e-mail address is bad, please contact ).