The Effect Of Foreign Direct Investment On Labour Productivity: Evidence From Estonia And Slovenia
AbstractThis paper studies the effects of foreign direct investment on labour productivity in manufacturing industries of two transition countries, Estonia and Slovenia. The emphasis is on the dimension of export/local market orientation. The study is based on firm-level panel data. It is shown that in Estonia the export oriented foreign investment enterprises have on average much lower labour productivity level than the domestic market oriented foreign affiliates. In Slovenia, on the contrary, the export orientation of a foreign affiliate is not correlated with lower labour productivity. No horizontal spillovers of foreign direct investment to domestic firms are detected in Estonia. In Slovenia, however, positive spillovers to domestic firms are found but there is no indication of spillovers to other foreign affiliates. The findings show that different types of foreign direct investment can have different effects on the host country and that the existence of positive spillovers may depend on the level of economic development of the host country.
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Bibliographic InfoPaper provided by Faculty of Economics and Business Administration, University of Tartu (Estonia) in its series University of Tartu - Faculty of Economics and Business Administration Working Paper Series with number 32.
Length: 50 pages
Date of creation: 2004
Date of revision:
foreign direct investment; productivity; spillovers; export oriented FDI;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-02 (All new papers)
- NEP-IFN-2004-12-02 (International Finance)
- NEP-TRA-2004-12-02 (Transition Economics)
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