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Foreign Direct Investment and Efficiency Benefits: A Conditional Quantile Analysis

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Author Info
Dimelis, Sophia
Louri-Dendrinou, Eleni
Abstract

This Paper analyses the production efficiency gains in terms of technology transfer and labour productivity changes caused by diverse degrees of foreign ownership. The analysis is based on a sample of 4056 domestic and foreign manufacturing firms operating in Greece in 1997. Departures from normality of labour productivity and its logarithm led to the adoption of the robust technique of quantile regression as providing a better view of the examined relationships by obtaining estimates at different quantiles. Interesting results include a positive and significant effect of foreign ownership on labour productivity which stems exclusively from full and majority owned affiliates and becomes significant only in the middle quantiles. Productivity spillovers benefiting local firms are also differentiated by degree of foreign ownership, with minority holdings exercising a stronger effect in most quantiles. Such distinct FDI effects stress the importance of policy modifications according to the level of development in the host economy, and the selected objectives.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2868.

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Date of creation: Jun 2001
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Handle: RePEc:cpr:ceprdp:2868

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Related research
Keywords: FDI; multinationals; productivity; spillovers;

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Find related papers by JEL classification:
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    Other versions:
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    Other versions:
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  19. Barbosa, Natalia & Louri, Helen, 2002. "On the determinants of multinationals' ownership preferences: evidence from Greece and Portugal," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 493-515, April. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pradhan, Jaya Prakash, 2004. "FDI spillovers and local productivity growth: evidence from Indian pharmaceutical industry," MPRA Paper 17080, University Library of Munich, Germany. [Downloadable!]
  2. Della Temenggung, 2007. "Productivity Spillovers from Foreign Direct Investment: Indonesian Manufacturing Industry’s Experience 1975-2000," DEGIT Conference Papers c012_048, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  3. Peri, Giovanni & Urban, Dieter, 2002. "The Veblen-Gerschenkron Effect of FDI in Mezzogiorno and East Germany," Working Papers 03-1, University of California at Davis, Department of Economics. [Downloadable!]
    Other versions:
  4. Rita Almeida, 2004. "The labor market effects of foreign-owned firms," Policy Research Working Paper Series 3300, The World Bank. [Downloadable!]
    Other versions:
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