Creating backward linkages from multinationals: is there a role for financial incentives?

Holger Görg, Aoife Hanley and Eric Strobl ()

No 1554, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We investigate whether government subsidies to local input manufacturers encourage procurement from foreign firms. We use a comprehensive panel data of Irish firms from 1983 until 2002. Our data shows a spontaneity about linkages and relative insensitivity to grant aid, although it may be the quality rather than quantity of linkages that matters. The longevity of a foreign firm's stay is one consistent driver of linkages where foreign firms need time to find out about local suppliers. Our results hold even when controlling for the possible joint determination of grants and linkages and the boundedness of the linkage variable.

Keywords: Multinational enterprises; backward linkages; subsidies (search for similar items in EconPapers)
JEL-codes: F23 H25 O14 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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Related works:
Chapter: Creating Backward Linkages from Multinationals: Is there a Role for Financial Incentives? (2016)
Journal Article: Creating Backward Linkages from Multinationals: Is there a Role for Financial Incentives? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1554

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