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The two ways of FDI R&D spillovers : Evidence from the French manufacturing industry

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  • Haithem Ben Hassine
  • Fabienne Boudier
  • Claude Mathieu

Abstract

Using French firm-level panel data, this study investigates R&D spillovers from inward foreign direct investment (FDI) with respect to both horizontal and vertical linkages (backward and forward). Using a Crepon, Duguet and Mairesse (CDM) model, we estimate an R&D-augmented Cobb–Douglas production function to assess the impact of R&D spillovers on firm performance. The results emphasize that international spillovers (from foreign affiliates to local firms) have a greater effect on firm performance than reverse spillovers (from local firms to foreign affiliates) and are more likely to be backward than forward. Moreover, the effect of backward spillovers depends on a firm’s absorptive capacity and is amplified in the case of outsourcing relationships.
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Suggested Citation

  • Haithem Ben Hassine & Fabienne Boudier & Claude Mathieu, 2014. "The two ways of FDI R&D spillovers : Evidence from the French manufacturing industry," Erudite Working Paper 2014-03, Erudite.
  • Handle: RePEc:eru:erudwp:wp14-03
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    File URL: http://www.erudite.univ-paris-est.fr/fileadmin/public/ERUDITE/erudwp/ERU-03-14-hbh-fb-cm.pdf
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    References listed on IDEAS

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    Cited by:

    1. Cristiano Antonelli & Alessandra Colombelli, 2017. "The locus of knowledge externalities and the cost of knowledge," Regional Studies, Taylor & Francis Journals, vol. 51(8), pages 1151-1164, August.
    2. repec:gam:jsusta:v:10:y:2018:i:11:p:3974-:d:179518 is not listed on IDEAS

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