A note on labour productivity and foreign inward direct investment
AbstractForeign direct investment (FDI) is not only a transfer of capital, but a complex bundle of capital and firm-specific assets. In particular, the transfer of production know-how improves overall productivity of FDI-receiving firms and to some extent also that of the other firms due to spillovers. The present note uses a small panel of Austrian manufacturing sectors and investigates this hypothesis empirically. In a flexible CES-framework, general and labour-augmenting productivity improving effects of inward FDI are found. Thus, the job creation potential of FDI highlighted in previous studies is likely to be overestimated.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 8 (2001)
Issue (Month): 4 ()
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Other versions of this item:
- Peter Egger & Michael Pfaffermayr, . "A Note on Labor Productivity and Foreign Inward Direct Investment," WIFO Working Papers, WIFO 109, WIFO.
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