Direct Foreign Investments And Productivity Growth In Hungarian Firms, 1992-1999

Jérôme Sgard

No 425, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The impact of FDI on total factor productivity in Hungary during the 1990s' is assessed with a large enterprise panel. Foreign equity is associated with higher productivity levels and has a substantial, positive spillover effect on aggregate TFP growth. However, this benefit is significant only when associated with export orientation, while inward-looking FDI has negative side effects. Regionally, the north-western area, close to EU borders, benefits much more from FDI, whether foreign-owned or locally-owned private firms are considered. Otherwise, only the later absorb a reduced volume of externalities. Finally, State ownership implies lower levels of productivity, but does not hinder the capacity to respond to market incentives, including FDI induced externalities.

Keywords: foreign direct investment; productivity; Hungary; transition; panel; localization; property rights (search for similar items in EconPapers)
JEL-codes: F21 G14 L11 P31 (search for similar items in EconPapers)
Pages: pages
Date: 2001-11-01
New Economics Papers: this item is included in nep-ifn, nep-mfd and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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