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Foreign Direct Investment and Productivity Spillovers: Updated Evidence from Central and Eastern Europe

  • Adam Gersl
  • Ieva Rubene
  • Tina Zumer

The paper discusses the inflows of foreign direct investment into the CEE countries and focuses on analysis of productivity spillovers. An overview of the relevance of foreign firms in the CEE economies is presented. Using firm-level data on manufacturing industries for the period 2000–-2005, the total factor productivity of domestic firms is estimated using the Petrin and Levinsohn (2003) method and subsequently related within a panel data model to foreign presence in the same industry and in industries linked via the production chain. The presence of productivity spillovers is tested for across several sub-samples to detect possible conditionalities.

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File URL: http://www.cnb.cz/en/research/research_publications/cnb_wp/download/cnbwp_2007_08.pdf
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Paper provided by Czech National Bank, Research Department in its series Working Papers with number 2007/8.

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Date of creation: Dec 2007
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Handle: RePEc:cnb:wpaper:2007/8
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  1. Aitken, Brian & Hanson, Gordon H. & Harrison, Ann E., 1997. "Spillovers, foreign investment, and export behavior," Journal of International Economics, Elsevier, vol. 43(1-2), pages 103-132, August.
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  7. Kokko, Ari, 1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Elsevier, vol. 43(2), pages 279-293, April.
  8. Ken Schoors & Bruno Merlevede, 2007. "FDI and the Consequences: Towards more complete capture of spillover effects," William Davidson Institute Working Papers Series wp886, William Davidson Institute at the University of Michigan.
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  11. Sjöholm, Fredrik, 1997. "Technology Gap, Competition and Spillovers from Direct Foreign Investment: Evidence from Establishment Data," SSE/EFI Working Paper Series in Economics and Finance 212, Stockholm School of Economics.
  12. Arnold, Jens & Javorcik, Beata S. & Mattoo, Aaditya, 2007. "Does services liberalization benefit manufacturing firms ? Evidence from the Czech Republic," Policy Research Working Paper Series 4109, The World Bank.
  13. K. Schoors & B. Van Der Tol, 2002. "Foreign direct investment spillovers within and between sectors: Evidence from Hungarian data," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 02/157, Ghent University, Faculty of Economics and Business Administration.
  14. Sinani, Evis & Meyer, Klaus E., 2004. "Spillovers of technology transfer from FDI: the case of Estonia," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 445-466, September.
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  17. Kinoshita, Yuko, 2001. "R&D and Technology Spillovers through FDI: Innovation and Absorptive Capacity," CEPR Discussion Papers 2775, C.E.P.R. Discussion Papers.
  18. Torlak, Elvisa, 2004. "Foreign Direct Investment, Technology Transfer, and Productivity Growth in Transition Countries Empirical Evidence from Panel Data," Center for European, Governance and Economic Development Research Discussion Papers 26, University of Goettingen, Department of Economics.
  19. Javorcik, Beata S. & Saggi, Kamal & Spatareanu, Mariana, 2004. "Does it matter where you come from? vertical spillovers from foreign direct investment and the nationality of investors," Policy Research Working Paper Series 3449, The World Bank.
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  23. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  24. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
  25. N. De Liso & G. Filatrella, 1999. "On technology competition," Working Papers 337, Dipartimento Scienze Economiche, Universita' di Bologna.
  26. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
  27. 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.
  28. 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.
  29. Blomstrom, Magnus, 1986. "Foreign Investment and Productive Efficiency: The Case of Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 35(1), pages 97-110, September.
  30. Ari Kokko, 1996. "Productivity spillovers from competition between local firms and foreign affiliates," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(4), pages 517-530.
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