How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition

Marcin Kolasa

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the existence of externalities associated with FDI in a host country by exploiting firm-level panel data covering the Polish corporate sector. The main findings are as follows. Local firms benefit from foreign presence in the same industry and in downstream industries. Absorptive capacity of domestic firms is highly relevant to the size of spillovers. Competitive pressure facilitates backward spillovers, while market power increases the extent of forward spillovers. Host country equity participation in foreign firms is consistent with higher unconditional productivity spillovers to domestic firms.

Keywords: foreign investment; spillovers; productivity; firm-level data (search for similar items in EconPapers)
JEL-codes: F23 O33 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-com, nep-cse, nep-dev, nep-eff, nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:8673

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