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Are Foreign Subsidiaries Technologically Superior to Local Firms? : Evidence from Romania

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  • IOAN VOICU

Abstract

This article examines whether foreign firms in Romania are technologically superior to domestic firms by separately estimating the technology-related productivity differentials between domestic firms and international joint ventures, and between domestic firms and foreign wholly owned enterprises. When comparing domestic firms and international joint ventures, the estimation corrects for selection biases induced by the unobserved heterogeneity in domestic firms' knowledge of local markets. The estimation method is based on a simple theoretical model of a multinational enterprise's choice of entry mode in a developing country. Both types of foreign firms are found to exhibit a technological advantage in virtually all manufacturing sectors.

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  • Ioan Voicu, 2004. "Are Foreign Subsidiaries Technologically Superior to Local Firms? : Evidence from Romania," Eastern European Economics, Taylor & Francis Journals, vol. 42(4), pages 5-32, July.
    • Handle: RePEc:mes:eaeuec:v:42:y:2004:i:4:p:5-32
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    Cited by:

    1. M. Taner Yigit & Ali M. Kutan, 2004. "Effects of Transition and Political Instability on Foreign Direct Investment Inflows : Central Europe and the Balkans," Working Papers 0407, Department of Economics, Bilkent University.
    2. Kutan, Ali M. & Yigit, Taner M., 2009. "European integration, productivity growth and real convergence: Evidence from the new member states," Economic Systems, Elsevier, vol. 33(2), pages 127-137, June.
    3. Vasvári, Tamás & Hegedűs, Dániel, 2020. "Hazai vállalatok az értékláncban. Egy feldolgozóipari vállalat beszállítói kapcsolatainak elemzése [Domestic players in the value chain: supplier relationships of a manufacturing company]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1245-1270.

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