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FDI from emerging markets and the productivity gap—An analysis on affiliates of BRICS EMNEs in Europe

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  • Sanfilippo, Marco

Abstract

This paper analyses differences in productivity of foreign affiliates of emerging market multinationals (EMNEs) from the BRICS against their counterparts from developed countries and domestic MNEs. Based on a large database on foreign affiliates in Europe, results find EMNEs at the bottom of the productivity ladder, with an average productivity gap of around 30 percentage points compared to more established competitors. The paper also shows that this effect is not homogeneously distributed since it varies in terms of sectorial distribution and technology intensity of activities performed, as well as by geographic destination. Moreover, firms’ heterogeneity plays a key role given that productivity differentials are largely accounted for the least productive firms, while those at the top of the distribution tend to reach similar performances than their more established competitors, especially in services.

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  • Sanfilippo, Marco, 2015. "FDI from emerging markets and the productivity gap—An analysis on affiliates of BRICS EMNEs in Europe," International Business Review, Elsevier, vol. 24(4), pages 665-676.
    • Handle: RePEc:eee:iburev:v:24:y:2015:i:4:p:665-676
    DOI: 10.1016/j.ibusrev.2014.11.005
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    4. Orlic, Edvard & Hashi, Iraj & Hisarciklilar, Mehtap, 2018. "Cross sectoral FDI spillovers and their impact on manufacturing productivity," International Business Review, Elsevier, vol. 27(4), pages 777-796.
    5. Gregori, Wildmer Daniel & Martinez Cillero, Maria & Nardo, Michela, 2021. "The effects of cross-border acquisitions on firms' productivity in the EU," Working Papers 2021-06, Joint Research Centre, European Commission.
    6. Wildmer Daniel Gregori & Maria Martinez Cillero & Michela Nardo, 2022. "The effects of cross-border acquisitions on firms’ productivity in the EU," Working Papers 2022.10, International Network for Economic Research - INFER.
    7. Cozza, C. & Rabellotti, R. & Sanfilippo, M., 2015. "The impact of outward FDI on the performance of Chinese firms," China Economic Review, Elsevier, vol. 36(C), pages 42-57.

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    More about this item

    Keywords

    Emerging market multinationals; Foreign direct investment; Total factor productivity;
    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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