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Productivity Spillovers From Multinational Corporations In Portugal: Vulnerability To Deficient Estimation

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  • PROENÇA, Isabel
  • FONTOURA, Paula
  • CRESPO, Nuno

Abstract

Evidence on productivity spillovers from FDI to domestic firms is ambiguous. Incorrect estimation procedures may be one of the sources for the contradictory results obtained in empirical studies on this subject. We observe that inadequacy of the estimation procedures leads to a severe underestimation of the spillover effect. An appropriated econometric methodology is discussed taking into consideration the possible simultaneity of FDI and other explanatory variables and endogeneity related to firm unobserved heterogeneity. Robust inference is also addressed. Our findings for the Portuguese case seem sufficient clear to warn about spillover results obtained with a non-judicious application of the classical panel data methods.

Suggested Citation

  • PROENÇA, Isabel & FONTOURA, Paula & CRESPO, Nuno, 2006. "Productivity Spillovers From Multinational Corporations In Portugal: Vulnerability To Deficient Estimation," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 6(1).
    • Handle: RePEc:eaa:aeinde:v:6:y:2006:i:1_7
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    References listed on IDEAS

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    8. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
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    Cited by:

    1. Randolph Luca Bruno & Maria Cipollina, 2018. "A meta†analysis of the indirect impact of foreign direct investment in old and new EU member states: Understanding productivity spillovers," The World Economy, Wiley Blackwell, vol. 41(5), pages 1342-1377, May.
    2. Tomáš Havránek & Zuzana Iršová, 2010. "Meta-Analysis of Intra-Industry FDI Spillovers: Updated Evidence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 60(2), pages 151-174, May.
    3. Nuno Crespo & Maria Paula Fontoura & Isabel Proença, 2009. "FDI spillovers at regional level: Evidence from Portugal," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 591-607, August.
    4. Stefanescu, Răzvan & Dumitriu, Ramona, 2015. "Creşterea economică a României între 1980 şi 2013 [The Economic Growth of Romania between 1980 and 2013]," MPRA Paper 61592, University Library of Munich, Germany.
    5. Santos, Eleonora & Khan, Shahed, 2018. "Technological Trajectories and FDI: Top Bananas and Underdogs," MPRA Paper 89620, University Library of Munich, Germany.
    6. Barbosa, Natália & Eiriz, Vasco, 2009. "Linking corporate productivity to foreign direct investment: An empirical assessment," International Business Review, Elsevier, vol. 18(1), pages 1-13, February.
    7. Anzolin, Guendalina & Andreoni, Antonio & Zanfei, Antonello, 2022. "What is driving robotisation in the automotive value chain? Empirical evidence on the role of FDIs and domestic capabilities in technology adoption," Technovation, Elsevier, vol. 115(C).
    8. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.

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    More about this item

    Keywords

    domestic firm productivity; multinational corporations; technological spillovers; panel data; Extended GMM;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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