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Foreign Direct Investment, Information Spillover, and Export Decision : The Concentric-Circle Model with Application to Hungarian Firm-Level Data

Author

Listed:
  • Iwasaki, Ichiro
  • 岩﨑, 一郎
  • イワサキ, イチロウ
  • Csizmadia, Péter
  • Illéssy, Miklós
  • Makó, Csaba
  • Miklós Szanyi

Abstract

In this paper, we empirically examine the impact of foreign direct investment (FDI) on the export decision of domestic firms using large-scale panel data from Hungary. In comparison with the conventional model that expresses the export propensity of multinational enterprises (MNEs) with a single variable, the concentric-circle model, considering the nested structure of industrial classification, more precisely specifies the source, extent, and direction of information spillovers from MNEs to indigenous firms. We also confirmed the close relationship between the information spillover effect and the heterogeneity of FDI and domestic firms.

Suggested Citation

  • Iwasaki, Ichiro & 岩﨑, 一郎 & イワサキ, イチロウ & Csizmadia, Péter & Illéssy, Miklós & Makó, Csaba & Miklós Szanyi, 2010. "Foreign Direct Investment, Information Spillover, and Export Decision : The Concentric-Circle Model with Application to Hungarian Firm-Level Data," Discussion Paper Series a527, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:a527
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    References listed on IDEAS

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    Cited by:

    1. Miklos Szanyi & Ichiro Iwasaki & Balazs Lengyel, 2011. "Industrial concentration, regional employment and productivity growth - evidence from the late transition period of Hungary," IWE Working Papers 195, Institute for World Economics - Centre for Economic and Regional Studies.
    2. Lengyel, Balázs & Iwasaki, Ichiro & Szanyi, Miklós, 2010. "Industry Cluster and Regional Economic Growth : Evidence from Hungary," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 51(2), pages 93-112, December.

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    More about this item

    Keywords

    FDI; information spillover; export decision; concentric-circle model; Hungary;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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