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The Nested Variable Model of FDI Spillover Effects Estimation Using Hungarian Panel Data

  • Iwasaki, Ichiro
  • Csizmadia, P騁er
  • Ill駸sy, Mikl
  • Mak鵺 Csaba
  • Szanyi, Mikl齠

A new empirical model is presented in this paper with respect to the productivity spillover effects of foreign direct investment (FDI) by focusing on the multi-layered structure of industrial classifications. In this model, the market presence of horizontal FDI in a host country is expressed using multiple spillover variables with a nested structure corresponding to the aggregated level of industrial classification. Using large-scale firm-level data from Hungary, we estimated the nested variable model and verified horizontal FDI spillover effects that cannot be captured with the conventional model having a single horizontal variable.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number 521.

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Length: 22 p.
Date of creation: May 2011
Date of revision:
Handle: RePEc:hit:hituec:521
Note: May 2011 (First version: November 2009)
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  1. Holger Görg & Alexander Hijzen & Balazs Muraközy, 2009. "The role of production technology for productivity spillovers from multinationals: Firm-level evidence for Hungary," Kiel Working Papers 1482, Kiel Institute for the World Economy.
  2. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
  3. Gábor Békés & Jörn Kleinert & Farid Toubal, 2009. "Spillovers from Multinationals to Heterogeneous Domestic Firms: Evidence from Hungary," Working Papers 2009-31, CEPII research center.
  4. Klara Sabirianova & Jan Svejnar & Katherine Terrell, 2005. "Distance to the Efficiency Frontier and Foreign Direct Investment Spillovers," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 576-586, 04/05.
  5. Javorcik, Beata Smarzynska & Spatareanu, Mariana, 2008. "To share or not to share: Does local participation matter for spillovers from foreign direct investment?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 194-217, February.
  6. 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.
  7. 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.
  8. Zoltan Acs & Colm O'Gorman & Laszlo Szerb & Siri Terjesen, 2006. "Could The Irish Miracle Be Repeated in Hungary?," Papers on Entrepreneurship, Growth and Public Policy 2005-33, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  9. Richard Kneller & Mauro Pisu, 2007. "Industrial Linkages and Export Spillovers from FDI," The World Economy, Wiley Blackwell, vol. 30(1), pages 105-134, 01.
  10. Makó, Csaba & Csizmadia, Péter & Illéssy, Miklós & Iwasaki, Ichiro & Szanyi, Miklós, 2009. "Organizational Innovation in the Manufacturing Sector and the Knowledge Intensive Business Services," CEI Research Paper Series 2009-01, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  11. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," Working Papers 452, Queen Mary University of London, School of Economics and Finance.
  12. Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," CEPR Discussion Papers 1365, C.E.P.R. Discussion Papers.
  13. Camilla Jensen, 2004. "Localized Spillovers in the Polish Food Industry: The Role of FDI in the Development Process?," Regional Studies, Taylor & Francis Journals, vol. 38(5), pages 533-548.
  14. Ksenia Yudaeva & Konstantin Kozlov & Natalia Melentieva & Natalia Ponomareva, 2003. "Does foreign ownership matter?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 383-409, 09.
  15. Eric Rugraff, 2008. "Are the FDI policies of the Central European countries efficient?," Post-Communist Economies, Taylor & Francis Journals, vol. 20(3), pages 303-316.
  16. Anne Boschini & Anders Olofsg�rd, 2007. "Foreign aid: An instrument for fighting communism?," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 622-648.
  17. Kolasa, Marcin, 2007. "How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition," MPRA Paper 8673, University Library of Munich, Germany.
  18. 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.
  19. 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.
  20. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
  21. Frances Ruane & Ali Uğur, 2005. "Foreign direct investment and productivity spillovers in Irish manufacturing industry: evidence from plant level panel data," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 53-66.
  22. Jim Taylor, 2007. "Estimating the Impact of the Specialist Schools Programme on Secondary School Examination Results in England," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(4), pages 445-471, 08.
  23. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
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