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Spillovers from Multinationals to Heterogeneous Domestic Firms: Evidence from Hungary

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Author Info

  • Gábor Békés

    (Institute of Economics-HAS - Institute of Economics-HAS, Hungary.)

  • Jörn Kleinert

    (University of Graz - Université de Graz)

  • Farid Toubal

    ()
    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

Technological and informational spillovers from multinational firms can be particularly beneficial to domestic firms especially in less developed economies. The technological superiority and management experience of foreign multinational firms yield various opportunities for learning. Yet, the importance of foreign firm's spillovers might vary with respect to the different intensities of the linkage between the multinational and the domestic firm, the differences in firms' absorptive capacity and their ability to face competition. We show using firm-level Hungarian data that positive spillovers from multinationals depend on the level of productivity and the exporting status of the domestic firm. Larger and more productive firms are more able to reap spillovers from multinationals than smaller and less productive firms. The export status, in contrast, is of minor importance.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00641328.

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Date of creation: 01 Oct 2009
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Publication status: Published, World Economy, 2009, 32, 10, 1408-1433
Handle: RePEc:hal:cesptp:halshs-00641328

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00641328
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Keywords: FDI. Multinationals; Productivity; Spillover; Quantile regression;

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References

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  1. J. David Brown & John S. Earle & Almos Telegdy, 2006. "The Productivity Effects of Privatization: Longitudinal Estimates from Hungary, Romania, Russia, and Ukraine," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 114(1), pages 61-99, February.
  2. László Halpern & Balázs Muraközy, 2007. "Does distance matter in spillover?," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 15, pages 781-805, October.
  3. Barry, Frank & Görg, Holger & Strobl, Eric, 2001. "Foreign Direct Investment, Agglomerations and Demonstration Effects: An Empirical Investigation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2907, C.E.P.R. Discussion Papers.
  4. Blalock, Garrick & Gertler, Paul J., 2009. "How firm capabilities affect who benefits from foreign technology," Journal of Development Economics, Elsevier, Elsevier, vol. 90(2), pages 192-199, November.
  5. Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3699, London School of Economics and Political Science, LSE Library.
  6. Girma, Sourafel & Görg, Holger, 2005. "Foreign direct investment, spillovers and absorptive capacity: evidence from quantile regressions," Discussion Paper Series 1: Economic Studies 2005,13, Deutsche Bundesbank, Research Centre.
  7. Smarzynska, Beata K., 2002. "Does foreign direct investment increase the productivity of domestic firms : in search of spillovers through backward linkages," Policy Research Working Paper Series 2923, The World Bank.
  8. Girma, Sourafel & Görg, Holger & Pisu, Mauro, 2007. "Exporting, Linkages and Productivity Spillovers from Foreign Direct Investment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6383, C.E.P.R. Discussion Papers.
  9. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 120(2), pages 701-728, May.
  10. Holger Görg & Eric Strobl, 2002. "Multinational Companies and Entrant Start-up Size: Evidence from Quantile Regressions," Review of Industrial Organization, Springer, Springer, vol. 20(1), pages 15-31, February.
  11. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, American Economic Association, vol. 94(1), pages 300-316, March.
  12. Nigel Driffield & Max Munday & Annette Roberts, 2002. "Foreign Direct Investment, Transactions Linkages, and the Performance of the Domestic Sector," International Journal of the Economics of Business, Taylor & Francis Journals, Taylor & Francis Journals, vol. 9(3), pages 335-351.
  13. Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 14(s1), pages 640-655, 08.
  14. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 605-618, June.
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Citations

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Cited by:
  1. Ichiro Iwasaki & Péter Csizmadia & Mikl�s Illéssy & Csaba Mak� & Mikl�s Szanyi, 2012. "The Nested Variable Model of FDI Spillover Effects: Estimation Using Hungarian Panel Data," International Economic Journal, Taylor & Francis Journals, Taylor & Francis Journals, vol. 26(4), pages 673-709, October.
  2. Tomáš Havránek & Zuzana Iršová, 2011. "How to Stir Up FDI Spillovers: Evidence from a Large Meta-Analysis," Working Papers IES, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies 2011/34, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Oct 2011.
  3. Nuno Crespo & Maria Paula Fontoura & Isabel Proença, 2009. "FDI spillovers at regional level: Evidence from Portugal," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 591-607, 08.
  4. Magdolna Sass & Miklos Szanyi, 2012. "Two essays on Hungarian relocations," IEHAS Discussion Papers, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences 1223, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  5. Daniela Maggioni, 2013. "Productivity Dispersion and its Determinants: The Role of Import Penetration," Journal of Industry, Competition and Trade, Springer, Springer, vol. 13(4), pages 537-561, December.
  6. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
  7. Damijan, Jože P. & Rojec, Matija & Majcen, Boris & Knell, Mark, 2013. "Impact of firm heterogeneity on direct and spillover effects of FDI: Micro-evidence from ten transition countries," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 895-922.
  8. Merlevede, Bruno & Schoors, Koen & Spatareanu , Mariana, 2013. "FDI spillovers and time since foreign entry," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 27/2013, Bank of Finland, Institute for Economies in Transition.

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