Do Vertical Spillovers from FDI Lead to Changes in Markups? Firm-level Evidence from Hungary
AbstractThis study analyses the relationship between foreign presence and price-cost margins of domestic competitors, and the inter-industry effect, e.g. the effect of foreign entry on domestic firms in supplier industries. By controlling for productivity and input demand, I try to distinguish empirically between theoretical explanations. For this exercise a large panel of Hungarian firms is used consisting of data for 1995-2003. Besides fixed effects, I use dynamic panel models to handle the persistence of price-cost margins and the possible endogeneity of explanatory variables. The empirical results show in a robust way that the effect of FDI on domestic competitors is strong and negative. The effect of foreign presence on supplier industries seems to be positive. Productivity change appears to be an important determinant of markup change, but foreign presence remains significant even after controlling for productivity change.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Duncker & Humblot, Berlin in its journal Applied Economics Quarterly.
Volume (Year): 53 (2007)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.duncker-humblot.de
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Priit Vahter, 2010.
"Does Fdi Spur Innovation, Productivity And Knowledge Sourcing By Incumbent Firms? Evidence From Manufacturing Industry In Estonia,"
University of Tartu - Faculty of Economics and Business Administration Working Paper Series
69, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Priit Vahter, 2010. "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," William Davidson Institute Working Papers Series wp986, William Davidson Institute at the University of Michigan.
- Priit Vahter, . "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," Discussion Papers 10/09, University of Nottingham, GEP.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Deborah Anne Bowen).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.