Inflation-Unemployment Trade-off: Some Evidence for the USA

Renato G. Flôres, Maria Paula Fontoura and Rogério Guerra Santos

No 2000/04, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper investigates the impact of foreign direct investment on the productivity performance of domestic firms in Portugal. The data comprise nine manufacturing sectors for the period 1992-95. Relatively to previous studies, model specification is improved by taking into consideration several aspects: the influence of the "technological gap" on spill-overs diffusion and the choice of its most appropriate interval; sectoral variation in the coefficients of the spill-overs effect; identification of constant, idiosyncratic sectoral factors by means of a fixed effects model; and the search for inter-sectoral positive spillover effects. The relationship between domestic firms productivity and the foreign presence does take place in a positive way, only if a proper technology differential between the foreign and domestic producers exists and the sectoral characteristics are favourable. In broad terms, spillovers diffusion is associated to modem industries in which the foreign owned establishments have a clear, but not too sharp, edge on the domestic ones. Besides, other specific sectoral influences can be pertinent; agglomerative location factors being one example.

Keywords: Domestic firm productivity; foreign direct investment; Portugal; technological spillovers. (search for similar items in EconPapers)
JEL-codes: F14 O52 (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp42000

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More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
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