Firm size and spillover effects from foreign direct investment: the case of Romania

Lenaerts, Karolien; Merlevede, Bruno

doi:10.1007/s11187-015-9652-2

Cited by 21 publications

(18 citation statements)

References 26 publications

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“…In a panel of 4000 UK manufacturing firms covering the period 1991-1996, Girma et al (2001) showed that FDI spillovers benefit domestic firms with a relatively small technology gap relative to technology leaders. Similar evidence was found for Romanian (Lenaerts and Merlevede 2015) and Hungarian firms (Békés et al 2009).…”

Section: Inward Foreign Direct Investment and Productivitysupporting

confidence: 80%

Does trade participation limit domestic firms’ productivity gains from inward foreign direct investment?

2020

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We examine to what extent domestic firms reap differential productivity gains from the presence of manufacturing affiliates of multinational firms in the home country (FDI spillovers), in the context of simultaneous participation in international trade through exporting and importing. FDI spillovers can occur within the industry (horizontal) and across industries due to client (forward) or supplier (backward) linkages of multinational firms, but the mechanisms underlying spillover effects may be attenuated if local firms are less reliant on inputs, clients, and competition in the domestic market. Fixed effects panel analyses on a sample of 4594 domestic Belgian firms during 2000–2007 reveal positive effects from horizontal, backward, and forward FDI spillovers on the productivity levels of domestic firms, as long as these firms do not engage in international trade. Horizontal spillovers from FDI are weaker for firms engaging in trade, while forward FDI spillovers do not benefit importing firms. Two-way traders benefit least from FDI spillovers. Forward and backward spillovers, are enhanced by human capital levels in local firms, while horizontal spillovers are reduced. The findings are broadly consistent with the notion that trade engagement and inward FDI can be substitutes in their effects on domestic firms’ productivity.

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Section: Inward Foreign Direct Investment and Productivitysupporting

confidence: 80%

Does trade participation limit domestic firms’ productivity gains from inward foreign direct investment?

2020

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“…In practice, we use information from two different input-output tables. Blalock &Gertler, 2008, andMerlevede, 2015), but it allows us to control for possible changes in the relationship between sectors over time. Similarly, backward technological spillovers at the industry level are a function of total R&D expenditures in the industries supplied by industry s at time t:…”

Section: Variables and Descriptive Statisticsmentioning

confidence: 99%

Technological spillovers from multinational firms

2020

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This paper aims to identify genuine technological spillovers from multinational firms (MNEs). To this end, we use data on R&D from MNEs to measure spillovers, while most of the existing literature uses output to measure the foreign presence in an industry (what we call output-based spillovers). In line with the existing literature, we distinguish between horizontal spillovers (i.e., intra-industry linkages) and vertical spillovers (i.e., backward-or downstream-and forward-or upstream-inter-industry linkages). Our results show that the three types of technological spillovers from MNEs are positive, with the horizontal spillovers the larger ones, followed by backward spillovers. The effect of forward spillovers is much smaller in magnitude. Moreover, we find that not controlling for industry size (i.e., technological spillovers from all firms in an industry) leads to underestimating both horizontal and backward spillovers from MNEs, and to overestimating forward spillovers from MNEs. Finally, we find that the distinction between technological and output-based spillovers is of great relevance. The size of backward technological spillovers is approximately 44% of the size of output-based backward spillovers, while for horizontal spillovers both types of spillovers are quite similar. Importantly, output-based forward spillovers are negative while technological forward spillovers are positive.

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“…The age of the owner, foreign trade regulations, taxes, other regulations, political instability, inflation and lack of skilled labor adversely reduced the probability of a firm's growth in terms of employment opportunities. Olivera and Fortunato (2008) and Lenaerts and Merlevede (2015) claim that a firm's growth is mainly explained by the firm's age and size.…”

Section: Determinants Of Productivity Growth In Service Firmsmentioning

confidence: 99%