IDEAS home Printed from https://ideas.repec.org/p/gwu/wpaper/0006.html
   My bibliography  Save this paper

Do Foreign Firms Crowd Out Domestic Firms? Evidence from the Czech Republic

Author

Listed:
  • Renata Kosova

    (The George Washington University School of Business)

Abstract

This paper analyzes the impact of foreign presence on growth and survival of domestic firms,while separating the two opposing effects of foreign presence: a negative "crowding out" and positive "technology spillovers". I focus on the question whether crowding out effect is dynamic, i.e. domestic firms cut production over time as foreign firms grow in the domestic industry, or a static effect realized upon foreign entry. Using 1994-2001 firm-level panel data for the Czech Republic my results show evidence of both technology spillovers and crowding out effects. However, crowding out appears to be a short-term or static phenomenon: initial foreign entry increases the exit rate of domestic firms. Subsequently, however, the sales growth of the foreign firms in the industry increases both the growth rate and survival of domestic firms. Dividing industries between low and high-export oriented, suggests that this positive foreign effect represents domestic demand-creation rather than export market spillovers. Further analyses also show that domestic firms in the technologically advanced industries are the primary beneficiaries of technology spillovers.

Suggested Citation

  • Renata Kosova, 2006. "Do Foreign Firms Crowd Out Domestic Firms? Evidence from the Czech Republic," Working Papers 0006, School of Business, The George Washington University.
  • Handle: RePEc:gwu:wpaper:0006
    as

    Download full text from publisher

    File URL: http://www.gwu.edu/%7Ebusiness/research/workingpapers/Crowding_outMarch2006.pdf
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gwu:wpaper:0006. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (GW School of Business Communications). General contact details of provider: http://edirc.repec.org/data/sbpgwus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.