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Foreign Direct Investment and Productivity spillovers in Swedish Manufacturing

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Author Info

  • Karpaty, Patrik

    ()
    (Department of Business, Economics, Statistics and Informatics)

  • Lundberg, Lars

    (FIEF)

Abstract

Based on a panel of data for Swedish manufacturing firms in 1990-2000, this paper finds strong evidence for the existence of positive spillover effects from inward FDI. The presence of foreign ownership in the same industry and region seems to enhance the total factor productivity of domestic firms. Moreover, the size of these FDI spillover effects seems to depend both on the nationality of the foreign MNF as well as on the absorptive capacity of the domestic firm, measured by its own R&D. It appears that this positive relationship between foreign presence and productivity cannot be explained as a consequence of reverse causality, i.e that FDI is attracted to highly productive regions and industries

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Bibliographic Info

Paper provided by Örebro University, School of Business in its series Working Papers with number 2004:2.

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Length: 53 pages
Date of creation: 29 Sep 2004
Date of revision:
Handle: RePEc:hhs:oruesi:2004_002

Contact details of provider:
Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
Phone: 019-30 30 00
Fax: 019-33 25 46
Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/
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Related research

Keywords: Multinational firms; Productivity Spillovers; Foreign Direct Investment;

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References

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  1. Magnus Blomstrom & Fredrik Sjoholm, 1998. "Technology Transfer and Spillovers? Does Local Participation with Multinationals Matter?," NBER Working Papers 6816, National Bureau of Economic Research, Inc.
  2. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
  3. Davide Castellani & Antonello Zanfei, 2007. "Multinational companies and productivity spillovers: is there a specification error?," Applied Economics Letters, Taylor & Francis Journals, vol. 14(14), pages 1047-1051.
  4. Frank Barry & Holger Gorg & Eric Strobl, 2005. "Foreign direct investment and wages in domestic firms in Ireland: Productivity spillovers versus labour-market crowding out," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 67-84.
  5. Salvador Barrios & Eric Strobl, 2002. "Foreign direct investment and productivity spillovers: Evidence from the Spanish experience," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(3), pages 459-481, September.
  6. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
  7. Steven Globerman, 1979. "Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 42-56, February.
  8. 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 569-96, September.
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Citations

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Cited by:
  1. Anetta Čaplánová & Rudolf Sivák & John Hudson, 2012. "The Impact of Foreign Direct Investment on Firms´ Innovation Activities," Politická ekonomie, University of Economics, Prague, vol. 2012(6), pages 764-779.
  2. Nuno Crespo & Isabel Proença & Maria Paula Fontoura, 2007. "FDI Spillovers at Regional Level: Evidence from Portugal," Working Papers Department of Economics 2007/28, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  3. Ebersberger, Bernd & Lööf, Hans, 2004. "Multinational Enterprises, Spillovers, Innovation and Productivity," Working Paper Series in Economics and Institutions of Innovation 22, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  4. Nuno Crespo & Maria Paula Fontoura, 2005. "Determinant Factors of FDI Spillovers – What Do We Really Know?," Working Papers Department of Economics 2005/06, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  5. 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.
  6. Mahmut Yasar & Catherine J. Morrison Paul, 2007. "Firm Performance and Foreign Direct Investment: Evidence from Transition Economies," Economics Bulletin, AccessEcon, vol. 15(21), pages 1-11.
  7. Joachim Wagner, 2011. "Productivity and International Firm Activities: What do we know?," Working Paper Series in Economics 194, University of Lüneburg, Institute of Economics.
  8. Heyman, Fredrik & Gustavsson Tingvall, Patrik & Sjöholm, Fredrik, 2006. "Acquisitions, Multinationals and Wage Dispersion," Working Paper Series 675, Research Institute of Industrial Economics.
  9. Karpaty, Patrik, 2004. "Are foreign owned firms more productive? Evidence from Swedish firm data," Working Papers 2004:6, Örebro University, School of Business.
  10. Brita Bye & Taran Fæhn & Leo A. Grünfeld, 2008. "Growth policy in a small, open economy. Domestic innovation and learning from abroad," Discussion Papers 572, Research Department of Statistics Norway.
  11. Poldahl, Andreas, 2004. "Domestic vs. International Spillovers: Evidence from Swedish Firm Level Data," Working Paper Series 200, Trade Union Institute for Economic Research.
  12. Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research.
  13. Ben Hamida, Lamia & Gugler, Philippe, 2009. "Are there demonstration-related spillovers from FDI?: Evidence from Switzerland," International Business Review, Elsevier, vol. 18(5), pages 494-508, October.
  14. Andreas Poldahl, 2006. "Domestic vs. International Spillovers: Evidence from Swedish Firm Level Data," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 277-294, December.
  15. Selén, Jan & Ståhlberg, Ann-Charlotte, 2004. "Wage and Compensation Inequality — How Different?," Working Paper Series 197, Trade Union Institute for Economic Research.
  16. Hamida, Lamia Ben, 2013. "Are there regional spillovers from FDI in the Swiss manufacturing industry?," International Business Review, Elsevier, vol. 22(4), pages 754-769.
  17. Johansson, Börje & Lööf, Hans & Ebersberger, Bernd, 2008. "The Innovation and Productivity Effect of Foreign Take-Over of National Assets," Working Paper Series in Economics and Institutions of Innovation 141, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  18. Lundborg, Per, 2005. "Wage Fairness, Growth and the Utilization of R&D Workers," Working Paper Series 206, Trade Union Institute for Economic Research.
  19. Winkler, Deborah, 2013. "Potential and actual FDI spillovers in global value chains : the role of foreign investor characteristics, absorptive capacity and transmission channels," Policy Research Working Paper Series 6424, The World Bank.

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