Technological Trajectories and FDI: Top Bananas and Underdogs

Eleonora Santos and Shahed Khan

MPRA Paper from University Library of Munich, Germany

Abstract: Previous empirical evidence searching for externalities from Foreign Direct investment in Portugal showed mixed results. Using a new database containing 5,045 Portuguese manufacturing firms grouped by technological trajectories, we investigate the occurrence and magnitude of externalities from FDI in 1995-2007. We find both positive and negative externalities in scale-intensive and supplier-dominated industries. The magnitude of externalities is higher in the current period than in lagged periods. Because positive externalities outweigh the negative externalities, on the whole a 1% increase in foreign presence (measured by turnover) increases the Total Factor Productivity of domestic firms by 0.42 percentage points. Thus, the Investment Promoting Agency should capture foreign projects in those technological groups.

Keywords: Technological Trajectories; Multinational Corporations; Productivity. (search for similar items in EconPapers)
JEL-codes: F23 L60 O32 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-eff, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Technological Trajectories and FDI: Top Bananas and Underdogs (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89620

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