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FDI Spillovers at Regional Level: Evidence from Portugal

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  • Nuno Crespo

    (ISCTE - Department of Economics and UNIDE-ERC)

  • Isabel Proença

    (ISEG-UTL and CEMAPRE)

  • Maria Paula Fontoura

    (ISEG-UTL)

Abstract

This paper aims to establish whether geographical proximity between multinational and domestic firms is relevant to the occurrence of FDI spillovers, by considering both horizontal and vertical spillovers. Using data for Portugal, this hypothesis is confirmed. In the case of horizontal externalities, the impact is negative, probably due to the competition effect. Concerning vertical externalities, a positive impact through backward linkages is observed. Additionally, omission of the regional dimension provokes a bias on the estimation of the intra-sectoral effect at the national level. These results raise important implications for the economic policies aiming to attract FDI and promote regional development.

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File URL: http://bru-unide.iscte.pt/RePEc/pdfs/ERCwp0508.pdf
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Bibliographic Info

Paper provided by ISCTE-IUL, Business Research Unit (BRU-IUL) in its series Working Papers Series 1 with number ercwp0508.

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Length: 35 pages
Date of creation: 15 Jun 2008
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Handle: RePEc:isc:iscwp1:ercwp0508

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Keywords: Vertical Spillovers; Horizontal Spillovers; Multinational Firms; productivity; FDI.;

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Cited by:
  1. Priit Vahter, . "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," Discussion Papers 10/09, University of Nottingham, GEP.
  2. Chaipat Poonpatpibul & Nutthikarn Vorasangasil & Manatchai Junetrakool & Punjaphut Prasitdechsakul, 2009. "Is There an Alternative to Export-led Growth for Thailand?," Working Papers 2009-02, Economic Research Department, Bank of Thailand.
  3. Tomas Havranek & Zuzana Irsova, 2011. "Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis," Working Papers 2011/07, Czech National Bank, Research Department.
  4. Ari Kokko & Victoria Kravtsova, 2012. "Regional Characteristics And Effects Of Inward Fdi: The Case Of Ukraine," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 3(2).
  5. 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.
  6. Tomáš Havránek & Zuzana Iršová, 2011. "How to Stir Up FDI Spillovers: Evidence from a Large Meta-Analysis," Working Papers IES 2011/34, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Oct 2011.
  7. Miroslav Sipikal, 2011. "Concentration of FDI and regional disparities - The role of regional policy," ERSA conference papers ersa10p126, European Regional Science Association.
  8. Del Bo, Chiara F., 2013. "FDI spillovers at different levels of industrial and spatial aggregation: Evidence from the electricity sector," Energy Policy, Elsevier, vol. 61(C), pages 1490-1502.
  9. Olajide, Victor C., 2012. "Cashless banking in Nigeria and its implications," MPRA Paper 38096, University Library of Munich, Germany.
  10. Nuno CRESPO & Isabel PROENÇA & Maria Paula FONTOURA, 2012. "The Spatial Dimension in FDI Spillovers: Evidence at the Regional Level from Portugal," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(1), pages 115-130.
  11. Irina Melo & Alexandra Ferreira-Lopes, 2013. "Regional and Sectoral Foreign Direct Investment in Portugal since Joining the EU: A Dynamic Portrait," GEE Papers 0049, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Jul 2013.
  12. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.

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