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Suppliers of multinationals and the forced linkage effect: Evidence from firm level data

In: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT

Author

Listed:
  • Olivier N. Godart
  • Holger Görg

Abstract

Using Information on more than 1000 firms in a number of emerging countries, we find quantitative evidence that suppliers of multinationals that are pressured by their customers to reduce production costs or develop new products have higher productivity growth than other firms, including other host country suppliers of multinationals. These findings provide first emplrical support for a “forced llnbge effect” from supplying multinational companies. Our findings hold controlling for other factors within and outside the supplier-customer relationship and when endogeneity concerns are taken Into consideration.

Suggested Citation

  • Olivier N. Godart & Holger Görg, 2016. "Suppliers of multinationals and the forced linkage effect: Evidence from firm level data," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 15, pages 277-288, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814749237_0015
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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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