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FDI and the Consequences: Towards more complete capture of spillover effects

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  • Ken Schoors

    ()

  • Bruno Merlevede

Abstract

We analyze productivity spillovers of FDI on domestic companies, both within and across industries. In the identification of intraindustry spillovers, we separate out labor market effects from other effects. Interindustry spillovers are identified through upstream, downstream, and supply-backward linkage effects. Dynamic input output tables are used to construct the linkages. For a panel of Romanian firms, we find evidence that labor market effects differ from other intraindustry effects. Spillovers across industries dominate those within industries. The supply-backward effect behaves as predicted by theory. Firm-specific level of technology, firm size, and ownership structure are all found to affect spillovers.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp886.pdf
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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp886.

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Length: pages
Date of creation: 01 Aug 2007
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Handle: RePEc:wdi:papers:2007-886

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Keywords: FDI; spillovers; absorptive capability; firm size; ownership structure;

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