IDEAS home Printed from https://ideas.repec.org/a/rae/jouraf/v97y2016i2p109-125.html
   My bibliography  Save this article

Multinationals and domestic firms in France:who gains from knowledge spillovers?

Author

Listed:
  • Pierre Blanchard

    (Université Paris-Est, ERUDITE (EA 437), UPEC,94010 Créteil, France)

  • Claude Mathieu

    (Université Paris-Est, ERUDITE (EA 437), UPEC,94010 Créteil, France)

Abstract

This paper aims to evaluate the direction, nature,and magnitude of spillovers between foreign-owned firmsand French firms from firm-level panel data. We estimateproduction functions at the firm level using the recent struc-tural techniques suggested in Ackerberg et al. (2006 ). Fromour results, three main conclusions can be drawn. First, spill-overs are at work in all research-intensive sectors, althoughthey have very weak effects in the less knowledge-based sec-tors. Second, foreign-owned firms belonging to high- andmedium-technology manufacturing industries that are set upin France benefit from horizontal spillovers, suggesting a tech-nology sourcing activity of foreign multinationals. Third, in-ward foreign investment increases the total factor productivityof French firms supplying inputs to multinationals (backwardspillovers) only in high- and medium-technology manufactur-ing industries and after 4 years.

Suggested Citation

  • Pierre Blanchard & Claude Mathieu, 2016. "Multinationals and domestic firms in France:who gains from knowledge spillovers?," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(2), pages 109-125.
    • Handle: RePEc:rae:jouraf:v:97:y:2016:i:2:p:109-125
    as

    Download full text from publisher

    File URL: https://link.springer.com/content/pdf/10.1007%2Fs41130-016-0009-2.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Holger Görg & David Greenaway, 2016. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 9, pages 163-189, World Scientific Publishing Co. Pte. Ltd..
    2. Kogut, Bruce & Chang, Sea Jin, 1991. "Technological Capabilities and Japanese Foreign Direct Investment in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 401-413, August.
    3. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 8, pages 101-133, Palgrave Macmillan.
    4. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    5. Ackerberg, Daniel & Lanier Benkard, C. & Berry, Steven & Pakes, Ariel, 2007. "Econometric Tools for Analyzing Market Outcomes," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 63, Elsevier.
    6. Wolfgang Keller & Stephen R. Yeaple, 2009. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 821-831, November.
    7. Iršová, Zuzana & Havránek, Tomáš, 2013. "Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis," World Development, Elsevier, vol. 42(C), pages 1-15.
    8. Fosfuri, Andrea & Motta, Massimo, 1999. " Multinationals without Advantages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 617-630, December.
    9. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    10. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
    11. Javorcik, Beata Smarzynska & Spatareanu, Mariana, 2008. "To share or not to share: Does local participation matter for spillovers from foreign direct investment?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 194-217, February.
    12. Salvador Barrios & Holger Görg & Eric Strobl, 2016. "Spillovers through backward linkages from multinationals: Measurement matters!," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 11, pages 213-226, World Scientific Publishing Co. Pte. Ltd..
    13. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
    14. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    15. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    16. Catherine Co, 2000. "R & D, Foreign Direct Investment and Technology Sourcing?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(4), pages 385-397, June.
    17. Andrea Fosfuri & Massimo Motta, 1999. "Multinationals without Advantages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 617-630, December.
    18. Jozef Konings, 2001. "The effects of foreign direct investment on domestic firms," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(3), pages 619-633, November.
    19. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    20. Holger Görg & Eric Strobl, 2016. "Multinational Companies And Productivity Spillovers: A Meta-Analysis," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 8, pages 145-161, World Scientific Publishing Co. Pte. Ltd..
    21. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2007. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 482-496, August.
    22. Nigel Driffield & James H. Love, 2003. "Foreign Direct Investment, Technology Sourcing and Reverse Spillovers," Manchester School, University of Manchester, vol. 71(6), pages 659-672, December.
    23. Francesca Sanna-Randaccio & Reinhilde Veugelers, 2007. "Multinational knowledge spillovers with decentralised R&D: a game-theoretic approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 47-63, January.
    24. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2013. "Cross-Country Differences in Productivity: The Role of Allocation and Selection," American Economic Review, American Economic Association, vol. 103(1), pages 305-334, February.
    25. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
    26. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    27. Bruno Van Pottelsberghe De La Potterie & Frank Lichtenberg, 2001. "Does Foreign Direct Investment Transfer Technology Across Borders?," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 490-497, August.
    28. Klaus E Meyer & Evis Sinani, 2009. "When and where does foreign direct investment generate positive spillovers? A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1075-1094, September.
    29. Nigel Driffield & James H. Love, 2005. "Who Gains From Whom? Spillovers, Competition And Technology Sourcing In The Foreign‐Owned Sector Of Uk Manufacturing," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(5), pages 663-686, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yilmaz Bayar & Marius Dan Gavriletea & Zeki Ucar, 2018. "Financial Sector Development, Openness, and Entrepreneurship: Panel Regression Analysis," Sustainability, MDPI, vol. 10(10), pages 1-11, September.
    2. H. Ben Hassine & F. Boudier & C. Mathieu, 2017. "The two ways of FDI R&D spillovers: evidence from the French manufacturing industry," Applied Economics, Taylor & Francis Journals, vol. 49(25), pages 2395-2408, May.
    3. Rama, Ruth, 2023. "Technological Transfer Channels of Food and Beverage Processing Multinationals to Host Countries: An Empirical Analysis," MPRA Paper 118162, University Library of Munich, Germany.
    4. Apostolov Mico & Scagnelli Simone Domenico, 2019. "Foreign-Versus Domestic-Owned firms in the Predicament ‘Cui bono?’," Business Systems Research, Sciendo, vol. 10(2), pages 18-36, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ioannis Bournakis & Sotiris Papaioannou & Marina Papanastassiou, 2022. "Multinationals and domestic total factor productivity: Competition effects, knowledge spillovers and foreign ownership," The World Economy, Wiley Blackwell, vol. 45(12), pages 3715-3750, December.
    2. Smeets, Roger & de Vaal, Albert, 2016. "Intellectual Property Rights and the productivity effects of MNE affiliates on host-country firms," International Business Review, Elsevier, vol. 25(1), pages 419-434.
    3. Seda Köymen Özer & Selin Sayek Böke, 2017. "The Characteristics of Domestic Firms: Materializing Productivity Spillovers from FDI," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(11), pages 2562-2584, November.
    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. Bournakis, Ioannis & Papanastassiou, Marina & Papaioannou, Sotiris, 2020. "Multinationals and Domestic TFP: Market Shares, Agglomerations Gains and Foreign Ownership," MPRA Paper 106626, University Library of Munich, Germany.
    6. 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.
    7. Sara L. McGaughey & Pascalis Raimondos & Lisbeth La Cour, 2018. "What is a Foreign Firm? Implications for Productivity Spillovers," CESifo Working Paper Series 7109, CESifo.
    8. Dea Tusha & Jacob A. Jordaan, 2021. "Biased FDI spillovers in incomplete datasets: An empirical examination," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 582-600, May.
    9. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
    10. Farole, Thomas & Winkler, Deborah, 2012. "Foreign firm characteristics, absorptive capacity and the institutional framework : the role of mediating factors for FDI spillovers in low- and middle-income countries," Policy Research Working Paper Series 6265, The World Bank.
    11. René Belderbos & Vincent Van Roy & Leo Sleuwaegen, 2021. "Does trade participation limit domestic firms’ productivity gains from inward foreign direct investment?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 83-109, March.
    12. Smruti Ranjan Behera, 2017. "Regional foreign direct investment and technology spillover: evidence across different clusters in India," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(7), pages 596-620, October.
    13. Olivier N. Godart & Holger Görg, 2016. "Suppliers of multinationals and the forced linkage effect: Evidence from firm level data," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 15, pages 277-288, World Scientific Publishing Co. Pte. Ltd..
    14. Muhammed BENLI, 2016. "Productivity spillovers from FDI in Turkey: Evidence from quantile regressions," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 177-196, Autumn.
    15. Javorcik, Beata S. & Spatareanu, Mariana, 2011. "Does it matter where you come from? Vertical spillovers from foreign direct investment and the origin of investors," Journal of Development Economics, Elsevier, vol. 96(1), pages 126-138, September.
    16. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    17. Muhammed BENLI, 2016. "Productivity spillovers from FDI in Turkey: Evidence from quantile regressions," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 177-196, Autumn.
    18. Yoshimichi Murakami & Keijiro Otsuka, 2017. "A Review of the Literature on Productivity Impacts of Global Value Chains and Foreign Direct Investment: Towards an Integrated Approach," Discussion Paper Series DP2017-19, Research Institute for Economics & Business Administration, Kobe University, revised Aug 2019.
    19. Sara L. McGaughey & Pascalis Raimondos & Lisbeth Cour, 2020. "Foreign influence, control, and indirect ownership: Implications for productivity spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1391-1412, December.
    20. Hanousek, Jan & Kocenda, Evzen & Maurel, Mathilde, 2011. "Direct and indirect effects of FDI in emerging European markets: A survey and meta-analysis," Economic Systems, Elsevier, vol. 35(3), pages 301-322, September.

    More about this item

    Keywords

    Productivity.FDI and reverse spillovers.Multinationals.Domestic firms.Panel data;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rae:jouraf:v:97:y:2016:i:2:p:109-125. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nathalie Saux-Nogues (email available below). General contact details of provider: https://edirc.repec.org/data/inrapfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.