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Productivity Spillovers from Multinational Corporations in the Portuguese Case: Evidence from a Short Time Period Panel Data

Author

Listed:
  • Isabel Proença
  • Maria Paula Fontoura
  • Nuno Crespo

Abstract

Empirical evidence on productivity spillovers - a concept that embodies the fact that foreign enterprises own intangible assets which can be transmitted to domestic firms, thus raising their productivity level - is ambiguous. With a panel data set at the firm level for the Portuguese manufacturing industry, we aim to uncover the possibility that the choice of statistical techniques will have profound effects on evidence of spillovers diffusion. We will consider the panel data models commonly used in the literature and the recent and more robust Extended GMM technique, specially devised for panels with a small number of time periods. We find that positive spillovers occur only when the technologic gap between domestic and foreign firms is moderate. Though all methods agree on this result. there are differences worth to be noted, revealing that the traditional estimates can sometimes be misleading.

Suggested Citation

  • Isabel Proença & Maria Paula Fontoura & Nuno Crespo, 2002. "Productivity Spillovers from Multinational Corporations in the Portuguese Case: Evidence from a Short Time Period Panel Data," Working Papers Department of Economics 2002/06, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp62002
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    File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp062002.pdf
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    References listed on IDEAS

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    4. Manuel Arellano, 1990. "Testing for Autocorrelation in Dynamic Random Effects Models," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 127-134.
    5. Fontoura, Maria Paula & Flôres Junior, Renato Galvão & Santos, Rogério Guerra, 2000. "Foreign direct investment spillovers: what can we learn from portuguese data?," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 366, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    6. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    7. Djankov, Simeon & Hoekman, Bernard M, 2000. "Foreign Investment and Productivity Growth in Czech Enterprises," World Bank Economic Review, World Bank Group, vol. 14(1), pages 49-64, January.
    8. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    9. Jozef Konings, 2000. "The Effects of Foreign Direct Investment on Domestic Firms: Evidence from Firm Level Panel Data in Emerging Economies," William Davidson Institute Working Papers Series 344, William Davidson Institute at the University of Michigan.
    10. Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages 723-739, November.
    11. Vinish Kathuria, 2000. "Productivity spillovers from technology transfer to Indian manufacturing firms," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 343-369, April.
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    Cited by:

    1. Nuno Crespo & Maria Paula Fontoura & Frank Barry, 2004. "EU Enlargement and the Portuguese Economy," The World Economy, Wiley Blackwell, pages 781-802.
    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. Rosanna Pittiglio & Filippo Reganati & Edgardo Sica, 2015. "Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?," Manchester School, University of Manchester, vol. 83(3), pages 346-378, June.
    4. Bouoiyour, Jamal, 2005. "Partenariat Euro-marocain et dynamique des investissements directs étrangers
      [Euro-Moroccan partnership and dynamic investment foreign direct]
      ," MPRA Paper 45992, University Library of Munich, Germany.
    5. Bouoiyour, Jamal, 2004. "Foreign direct investment in Morocco," MPRA Paper 31457, University Library of Munich, Germany.
    6. Horácio Faustino & Nuno Carlos Leitão, 2005. "The Intra Industry Trade between Portugal European Union, Portugal Spain, Portugal-France, Portugal Germany, Portugal-Ireland, Portugal-Greece and Portugal-Netherlands - a Dynamic Panel Data Analysis ," ERSA conference papers ersa05p23, European Regional Science Association.

    More about this item

    Keywords

    Domestic firm productivity; multinational corporations; Portugal; technological spillovers; panel data; Extended GMM.;

    JEL classification:

    • 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
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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