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Foreign Direct Investment Spillovers in Portugal: Additional Lessons from a Country Study

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  • Renato G. Flôres
  • Maria Paula Fontoura
  • Rogério Guerra Santos

Abstract

This paper investigates the impact of foreign direct investment (FDI) on the productivity of Portuguese manufacturing sectors. It improves on previous studies by considering the choice of the most appropriate interval of the technological gap for spillovers diffusion. Sectoral variation in the coefficients of the spillover effect is also allowed for. Idiosyncratic factors are identified by means of a fixed effects panel model and positive inter-sectoral spillovers are also examined. Significant spillovers require a proper technological differential between foreign and domestic producers and favourable sectoral characteristics. They may occur in modern industries in which the foreign firms have a clear, but not too sharp, edge on the domestic ones. Agglomeration effects are also a pertinent specific influence. Ce texte examine les répercussions des investissements directs étrangers (IDE) sur la productivité des secteurs manufacturiers au Portugal. La spécification du modèle est améliorée par le choix de l'intervalle le plus approprié de l'écart technologique pour la diffusion des spillovers. Nous tenons également compte des variations sectorielles dans les coefficients de spillovers; des facteurs sectoriels idiosyncrasiques sont identifiés au moyen d'un modèle à effets fixes. Les spillovers intersectoriels positifs sont examinés. Des spillovers importants requièrent un véritable écart technologique entre producteurs étrangers et domestiques ainsi que des caractéristiques sectorielles favorables. Ils peuvent se produire dans les industries modernes où les entreprises étrangères jouissent d'une supériorité nette, mais pas trop marquée. Les effets d'agglomération exercent aussi une influence spécifique pertinente.

Suggested Citation

  • Renato G. Flôres & Maria Paula Fontoura & Rogério Guerra Santos, 2007. "Foreign Direct Investment Spillovers in Portugal: Additional Lessons from a Country Study," The European Journal of Development Research, Taylor and Francis Journals, vol. 19(3), pages 372-390.
  • Handle: RePEc:taf:eurjdr:v:19:y:2007:i:3:p:372-390 DOI: 10.1080/09578810701507126
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    Cited by:

    1. C. Imbriani & R. Pittiglio & F. Reganati & E. Sica, 2014. "How Much do Technological Gap, Firm Size, and Regional Characteristics Matter for the Absorptive Capacity of Italian Enterprises?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(1), pages 57-72, February.
    2. Araújo, Fabio & Issler, João Victor & Fernandes, Marcelo, 2006. "A stochastic discount factor approach to asset pricing using panel data," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 628, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    3. Rosanna Pittiglio & Filippo Reganati & Edgardo Sica, 2015. "Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?," Manchester School, University of Manchester, vol. 83(3), pages 346-378, June.
    4. Zhijie Xiao & Luiz Renato Lima, 2007. "Testing Covariance Stationarity," Econometric Reviews, Taylor & Francis Journals, pages 643-667.
    5. Flôres Junior, Renato Galvão, 2006. "The diversity of diversity: further methodological considerations on the use of the concept in cultural economics," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 626, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    6. repec:sbe:breart:v:27:y:2007:i:1:a:1570 is not listed on IDEAS
    7. repec:voj:journl:v:63:y:2016:i:3:p:313-323 is not listed on IDEAS
    8. Lima, Luiz Renato & Gaglianone, Wagner Piazza & Sampaio, Raquel M.B., 2008. "Debt ceiling and fiscal sustainability in Brazil: A quantile autoregression approach," Journal of Development Economics, Elsevier, pages 313-335.
    9. Miguel Lebre de Freitas & Ricardo Paes Mamede, 2011. "Structural transformation of Portuguese exports and the role of foreign-owned firms: A descriptive analysis for the period 1995-2005," Notas Económicas, Faculty of Economics, University of Coimbra, issue 33, pages 20-43, June.
    10. Rivano, Ricardo de Oliveira & Wallace, Neil, 2006. "New models of old(?) payment questions," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 619, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    11. Flôres Junior, Renato Galvão, 2006. "Dois ensaios sobre diversidade cultural e o comércio de serviços," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 622, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    12. Lima, Luiz Renato & Néri, Breno Pinheiro, 2007. "Comparing Value-at-Risk Methodologies," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 27(1), May.
    13. repec:kap:iaecre:v:20:y:2014:i:1:p:57-72 is not listed on IDEAS
    14. Flôres Junior, Renato Galvão, 2008. "Trade and poverty in latin american countries: conceptual and methodological challenges," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 675, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).

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