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Spatial dependence, foreign investment and productivity spillovers in new EU member states

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  • Nebojša Stojčić
  • Edvard Orlić

Abstract

This paper presents new empirical evidence on the impact of foreign direct investment (FDI) technology spillovers on the productivity of domestic firms in manufacturing and services in Central and East European regions over the period 2007–11. The complex impact of FDI is separated into direct and indirect effects while accounting for spatial feedback effects. Findings suggest that FDI presence generates negative intra- and interregional market-stealing effects on direct rivals and positive spillovers on downstream firms. The effects are larger from FDI in neighbouring regions and increase with distance.

Suggested Citation

  • Nebojša Stojčić & Edvard Orlić, 2020. "Spatial dependence, foreign investment and productivity spillovers in new EU member states," Regional Studies, Taylor & Francis Journals, vol. 54(8), pages 1057-1068, July.
    • Handle: RePEc:taf:regstd:v:54:y:2020:i:8:p:1057-1068
    DOI: 10.1080/00343404.2019.1653451
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    7. Pawel Dobrzanski & Wojciech Grabowski, 2019. "Structural and productivity changes of Central and Eastern Europe," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(2), pages 427-471.
    8. Vujanović, Nina & Stojčić, Nebojša & Hashi, Iraj, 2021. "FDI spillovers and firm productivity during crisis: Empirical evidence from transition economies," Economic Systems, Elsevier, vol. 45(2).
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    10. Dazhong Wu & Michael Tannen & Julius Anyu & Sergey Ivanov & Feng Xu, 2023. "Contract manufacturing, market competition, and labor productivity in US manufacturing industries," Operations Management Research, Springer, vol. 16(1), pages 377-390, March.
    11. Fandi Yang & Peng Yuan & Gongxiong Jiang, 2022. "Knowledge Spillovers, Institutional Environment, and Entrepreneurship: Evidence from China," Sustainability, MDPI, vol. 14(22), pages 1-27, November.
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    13. Chu, Chau M. & Nguyen, Bach, 2025. "Foreign small- and medium-sized enterprises and regional institutions," Journal of World Business, Elsevier, vol. 60(5).
    14. Clive Egbert Coetzee & Ewert P. J. Kleynhans & Ewert P. J. Kleynhans, 2022. "The Effect of Spatial Unemployment on the Neighbouring Regions’ Economies: A Regional Case Study of KwaZulu-Natal in South Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(4 (Winter), pages 401-431.
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    16. Drilo, Boris & Stojcic, Nebojsa & Vizek, Maruska, 2021. "Broadband speed and firm entry in digitally intensive sectors: The case of Croatia," MPRA Paper 108717, University Library of Munich, Germany.
    17. Xiaodong Chen & Haoming Mi & Peng Zhou, 2026. "Interdependence of government expenditure among European countries: Productivity spillover and strategic interaction," Economic Inquiry, Western Economic Association International, vol. 64(2), pages 681-701, April.
    18. Özen, Şükrü & Sorkun, Metehan Feridun & Önder, Çetin, 2024. "How global and national institutions interactively shape firms’ commitment to innovation regimes in latecomer countries," International Business Review, Elsevier, vol. 33(5).
    19. Amat Adarov & David Klenert & Robert Marschinski & Robert Stehrer, 2022. "Productivity drivers: empirical evidence on the role of digital and intangible capital, FDI and integration," Applied Economics, Taylor & Francis Journals, vol. 54(48), pages 5515-5531, October.
    20. Zhang, Jie & Chen, Jiwei & Chen, Guohui & Zhi, Manlin, 2025. "The temporal and spatial dynamics of FDI productivity spillovers: A technology gap perspective," Economic Systems, Elsevier, vol. 49(3).
    21. Lee, Junyong & Oh, Frederick Dongchuhl, 2026. "Foreign direct investment during financial crises: Evidence from Korea," International Review of Economics & Finance, Elsevier, vol. 109(C).

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