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FDI Spillovers at Regional Level: Evidence from Portugal

  • Nuno Crespo
  • Isabel Proença
  • Maria Paula Fontoura

This paper aims to establish whether geographical proximity between the locations of multinational firms and domestic firms facilitates the occurrence of FDI spillovers. Using data for Portugal, this hypothesis is clearly confirmed. However, the impact varies according to whether the externalities considered are horizontal or vertical. In the first case, the impact is negative, which may result from the competition effect at regional level. With regard to vertical externalities, a positive impact through backward linkages is observed. These results raise important implications for the definition of economic policies aiming to attract FDI and promote regional development.

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Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2007/28.

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Date of creation: 2007
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Handle: RePEc:ise:isegwp:wp282007
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Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL

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