Productivity Spillovers and the Entry of Foreign-Owned Firms: The Case of Japanese Manufacturing Firms
AbstractThis paper shows that in the short run an increase in foreign firms' industry share lowers the TFP growth of Japanese firms as a result of the decrease in market power. However, in the long run, the entry of foreign-owned firms has a positive effect on the productivity of local firms as a result of technology spillovers. In addition, the results suggest that foreign firms exert competitive pressure that forces Japanese firms with a high level of technological capabilities raise their productivity growth.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d06-192.
Date of creation: Nov 2006
Date of revision:
Technology Spillovers; Market Power; FDI; Productivity; Absorptive Capacity;
Find related papers by JEL classification:
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-25 (All new papers)
- NEP-COM-2006-11-25 (Industrial Competition)
- NEP-EFF-2006-11-25 (Efficiency & Productivity)
- NEP-SEA-2006-11-25 (South East Asia)
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- Murakami, Yukako, 2007. "Technology spillover from foreign-owned firms in Japanese manufacturing industry," Journal of Asian Economics, Elsevier, vol. 18(2), pages 284-293, April.
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