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FDI Spillovers at Regional Level: Evidence from Portugal

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Author Info
Nuno Crespo
Isabel Proença
Maria Paula Fontoura

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Abstract

This paper aims to establish whether geographical proximity between the locations of multinational firms and domestic firms facilitates the occurrence of FDI spillovers. Using data for Portugal, this hypothesis is clearly confirmed. However, the impact varies according to whether the externalities considered are horizontal or vertical. In the first case, the impact is negative, which may result from the competition effect at regional level. With regard to vertical externalities, a positive impact through backward linkages is observed. These results raise important implications for the definition of economic policies aiming to attract FDI and promote regional development.

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Paper provided by Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon. in its series Working Papers with number 2007/28.

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Date of creation: 2007
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Handle: RePEc:ise:isegwp:wp282007

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Postal: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: http://www.iseg.utl.pt/departamentos/economia/

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Related research
Keywords: vertical spillovers; horizontal spillovers; multinational firms productivity; FDI.;

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Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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