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Horizontal and Vertical FDI Spillovers: Recent Evidence from the Czech Republic

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  • Juraj Stancik

Abstract

This paper analyzes the effects of foreign direct investment on the sales growth rate of domestic companies in the Czech Republic. Using firm- level panel data from 1995 to 2003, it studies both horizontal and vertical spillovers. The study allows for the lagged nature of spillovers and pays at- tention to the potential endogeneity of FDI with respect to future industry growth. The results suggest that domestic companies are mostly su®ering in the presence of foreign companies, especially in upstream sectors. Negative horizontal and forward spillovers are present mainly in recent years. Time sensitivity is revealed for horizontal spillovers.

Suggested Citation

  • Juraj Stancik, 2007. "Horizontal and Vertical FDI Spillovers: Recent Evidence from the Czech Republic," CERGE-EI Working Papers wp340, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  • Handle: RePEc:cer:papers:wp340
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    File URL: http://www.cerge-ei.cz/pdf/wp/Wp340.pdf
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    References listed on IDEAS

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    1. Damijan, Joze P. & Knell, Mark & Majcen, Boris & Rojec, Matija, 2003. "The role of FDI, R&D accumulation and trade in transferring technology to transition countries: evidence from firm panel data for eight transition countries," Economic Systems, Elsevier, vol. 27(2), pages 189-204, June.
    2. Joze P. Damijan & Mark Knell & Boris Majcen & Matija Rojec, 2003. "Technology Transfer through FDI in Top-10 Transition Countries: How Important are Direct Effects, Horizontal and Vertical Spillovers?," William Davidson Institute Working Papers Series 549, William Davidson Institute at the University of Michigan.
    3. Jan Hanousek & Evžen Kočenda & Jan Svejnar, 2007. "Origin and concentration," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(1), pages 1-31, March.
    4. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    5. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    6. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    7. Jan Bena & Jan Hanousek, 2008. "Rent Extraction by Large Shareholders: Evidence Using Dividend Policy in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(03-04), pages 106-130, May.
    8. Meghana Ayyagari & Renáta Kosová, 2010. "Does FDI Facilitate Domestic Entry? Evidence from the Czech Republic," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 14-29, February.
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    Citations

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    Cited by:

    1. Gorodnichenko, Yuriy & Svejnar, Jan & Terrell, Katherine, 2014. "When does FDI have positive spillovers? Evidence from 17 transition market economies," Journal of Comparative Economics, Elsevier, pages 954-969.
    2. Falilou Fall & Christine Lewis, 2017. "Fostering Productivity for Income Convergence in the Czech Republic," OECD Economics Department Working Papers 1362, OECD Publishing.
    3. Anwar, Sajid & Nguyen, Lan Phi, 2014. "Is foreign direct investment productive? A case study of the regions of Vietnam," Journal of Business Research, Elsevier, vol. 67(7), pages 1376-1387.
    4. Gorodnichenko, Yuriy & Svejnar, Jan & Terrell, Katherine, 2007. "When Does FDI Have Positive Spillovers? Evidence from 17 Emerging Market Economies," CEPR Discussion Papers 6546, C.E.P.R. Discussion Papers.
    5. Ebghaei, Felor, 2015. "Yabancı İştirakli Firmaların İhracat Yöneliminin Doğrudan Yabancı Sermaye Yatırımlarının Dikey Yayılmaları Üzerindeki Etkileri: Türkiye İmalat Sanayi Örneği
      [Effect of Firm’s Export-Orienteation on
      ," MPRA Paper 77893, University Library of Munich, Germany, revised Mar 2017.
    6. Ebghaei, Felor & Akkoyunlu Wigley, Arzu, 2015. "Yabancı İştirakli Firmaların İhracat Yöneliminin Doğrudan Yabancı Sermaye Yatırımlarının Dikey Yayılmaları Üzerindeki Etkileri: Türkiye İmalat Sanayi Örneği
      [Effect of Firm’s Export-Orienteation on
      ," MPRA Paper 77954, University Library of Munich, Germany, revised Mar 2017.

    More about this item

    Keywords

    Productivity; growth; spillovers; FDI; ownership.;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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