FDI Spillovers at Regional Level: Evidence from Portugal

Nuno Crespo (), Isabel Proença () and Maria Paula Fontoura

No ercwp0508, Working Papers Series 1 from ISCTE-IUL, Business Research Unit (BRU-IUL)

Abstract: This paper aims to establish whether geographical proximity between multinational and domestic firms is relevant to the occurrence of FDI spillovers, by considering both horizontal and vertical spillovers. Using data for Portugal, this hypothesis is confirmed. In the case of horizontal externalities, the impact is negative, probably due to the competition effect. Concerning vertical externalities, a positive impact through backward linkages is observed. Additionally, omission of the regional dimension provokes a bias on the estimation of the intra-sectoral effect at the national level. These results raise important implications for the economic policies aiming to attract FDI and promote regional development.

Keywords: Vertical Spillovers; Horizontal Spillovers; Multinational Firms; productivity; FDI. (search for similar items in EconPapers)
JEL-codes: F21 F23 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-06-15
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: FDI spillovers at regional level: Evidence from Portugal* (2009)
Working Paper: FDI Spillovers at Regional Level: Evidence from Portugal (2007)
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