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Indirect productivity effects from foreign direct investment and multinational firm heterogeneity

Author

Listed:
  • Karolien Lenaerts

    (Ghent University
    Research Foundation-Flanders (FWO-Vlaanderen)
    CEPS)

  • Bruno Merlevede

    (Ghent University)

Abstract

This paper analyzes for a panel of Romanian manufacturing firms whether the quality of foreign firms, measured by their productivity level, affects their potential as a source of indirect productivity effects on domestic firms. We find that only sufficiently productive foreign firms generate positive productivity effects on domestic supplier firms. The most productive foreign firms are the main source of productivity effects. Domestic firms with higher productivity levels also enjoy larger total positive productivity effects. When supplying foreign firms that are less productive than themselves, domestic firms experience zero to negative effects.

Suggested Citation

  • Karolien Lenaerts & Bruno Merlevede, 2018. "Indirect productivity effects from foreign direct investment and multinational firm heterogeneity," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(2), pages 377-400, May.
    • Handle: RePEc:spr:weltar:v:154:y:2018:i:2:d:10.1007_s10290-017-0298-9
    DOI: 10.1007/s10290-017-0298-9
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    Cited by:

    1. Bruno Merlevede & Victoria Purice, 2019. "Border Regimes And Indirect Productivity Effects From Foreign Direct Investment," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 19/965, Ghent University, Faculty of Economics and Business Administration.

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    More about this item

    Keywords

    FDI spillovers; Multinationals; Firm heterogeneity; Technology transfer;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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