Creating backward linkages from multinationals: Is there a role for financial incentives?
AbstractWe investigate whether government subsidies to local input manufacturers encourage procurement from foreign firms. We use a comprehensive panel data of Irish firms from 1983 until 2002. Our data shows a spontaneity about linkages and relative insensitivity to grant aid, although it may be the quality rather than quantity of linkages that matters. The longevity of a foreign firm’s stay is one consistent driver of linkages where foreign firms need time to find out about local suppliers. Our results hold even when controlling for the possible joint determination of grants and linkages and the boundedness of the linkage variable
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1554.
Length: 27 pages
Date of creation: Sep 2009
Date of revision:
multinational enterprises; backward linkages; subsidies;
Other versions of this item:
- Holger Görg & Aoife Hanley & Eric Strobl, 2011. "Creating Backward Linkages from Multinationals: Is there a Role for Financial Incentives?," Review of International Economics, Wiley Blackwell, vol. 19(2), pages 245-259, 05.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
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