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How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition

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Author Info
Marcin Kolasa (National Bank of Poland, Economic Institute, Warsaw School of Economics)

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Abstract

This paper examines the existence of externalities associated with FDI in host country by exploiting firm-level panel data covering the Polish corporate sector. The main findings are as follows: Local firms benefit form foreign presence in the same industry and in downstream industries. Absorptive capacity of domestci firms is highly relevant to the size of spillovers. Competetive pressure faciliates backward spillovers, while market power increases the extent of forward spilovers. Host country equity participation in foreign firms is consistent with higher unconditional productivity spillovers to domestic firms.

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Paper provided by National Bank of Poland, Economic Institute in its series National Bank of Poland Working Papers with number 42.

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Length: 32
Date of creation: Mar 2007
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Handle: RePEc:nbp:nbpmis:42

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Related research
Keywords: foreign direct investment; spillovers; firm-level data;

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Find related papers by JEL classification:
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hagemejer, Jan & Kolasa, Marcin, 2008. "Internationalization and economic performance of enterprises: evidence from firm-level data," MPRA Paper 8720, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Adam Gersl & Ieva Rubene & Tina Zumer, 2007. "Foreign Direct Investment and Productivity Spillovers: Updated Evidence from Central and Eastern Europe," Working Papers 2007/8, Czech National Bank, Research Department. [Downloadable!]
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