TFP spillover effects via trade and FDI channels

Abstract

As a consequence of globalisation, economic growth and productivity have become more sensitive to developments beyond national frontiers. This paper explores trade (import and export) and foreign direct investment (FDI) as channels of international total factor productivity (TFP) spillovers. FDI and trade are potentially important sources of productivity growth; however, empirical literature is inconclusive as to the nature and extent of spillovers and does not simultaneously cover all three channels. Our main goal is to examine the transmission of TFP spillover effects jointly through trade and FDI channels in 41 countries (members of the EU and OECD) during the period 1995-2014. We use dynamic panel estimation strategies. The main findings are: 1) Each of the spillover channels of TFP is significant for TFP when studied separately; 2) Joint examination of all channels allows for concluding that the export channel is the dominant one.

Privatisation of socially owned enterprises, the methods used and the impact on economic growth: empirical evidence from Kosovo

“…Both of these variables are expected to affect the volume of the balance of payments, which in turn affects economic activity. Compared to imports, EXP is expected to have a positive impact on economic growth and vice versa (Pietrucha & _ Zelazny, 2020). Next, the dummy fixed effects (uit) and error term (eit) are included in the model specification.…”

Economic determinants of total factor productivity growth: The Bayesian modelling averaging approach

“…To sum up, the literature argues that the following factors influence productivity: − the level of human capital that represents the quality of labour in terms of measurement (Grossman & Helpman, 1991 − the level of competitiveness (trade-as well as freedom-related); − the level of education (Bronzini & Piselli, 2006;Artige & Nicolini, 2006); − the openness of the economy to capital investments, and the transfer of knowledge captured by FDI flows (Grossman & Helpman, 1991;Pietrucha & Żelazny, 2020;Makieła, Wojciechowski, & Wach, 2021). FDI conclusively transmits to growth via input change yet Makieła and Ouattara (2018) notice that statistical evidence lacks to support transmission via the TFP channel; − openness towards trade (Hung et al, 2004;Danquah et al, 2014;Jorgenson & Vu, 2018); − transportation infrastructure (Liu, Wu, & Liu, 2010); − infrastructure and machinery also known as non-ICT (Bronzini & Piselli, 2006;Decker et al, 2009); − quality of labour infput (Manuelli & Seshadri, 2014); − inequality (Sequeira et al 2017;Espoir & Ngepah, 2020).…”

Privatisation of Socially Owned Enterprises, the Methods Used and the Impact on Economic Growth Empirical evidence from Kosovo

“…Both of these variables are expected to affect the volume of the balance of payments, which in turn affects economic activity. Compared to imports, EXP is expected to have a positive impact on economic growth and vice versa (Pietrucha & Żelazny, 2019). Next, the dummy xed effects (uit) and error term (εit) are included in the model speci cation.…”