offered significant incentives in order to attract foreign direct investments (FDI), being motivated to do so by expectations of possible spillover benefits. Using an unbalanced panel of firm level data in Bulgaria, Poland and Romania over the 1995-2003 period, we examine the impact of foreign firms on domestic firms’ productivity. In particular, we try to answer the following research questions: 1) Are there any spillover effects of FDI, and if so, are they positive or negative? 2) Are spillover effects more likely to occur within or across sectors? 3) Are the existence, the direction and the magnitude of spillovers conditioned by region, sector and firm-specific characteristics? Our findings show that FDI spillovers do exist both within and across complementary manufacturing sectors, and that inter-sectoral spillovers dominate intra sectoral effects. More interestingly, we find that geography, technological content of foreign firms’ production, and domestic firm size are all factors able to condition the exploitation of productivity spillovers. Although these results should be interpreted with caution, they provide a good starting point for further research in this area.
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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number
DYNREG11.
Length: 27 pages Date of creation: 2007 Date of revision: Handle: RePEc:esr:wpaper:dynreg11
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Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
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