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

  • Isabel Proença
  • Maria Paula Fontoura
  • Nuno Crespo

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.

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File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp062002.pdf
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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 2002/06.

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Date of creation: 2002
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Handle: RePEc:ise:isegwp:wp62002
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Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL

Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

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  1. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  2. 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.
  3. 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.
  4. Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," SSE/EFI Working Paper Series in Economics and Finance 99, Stockholm School of Economics.
  5. 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.
  6. 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.
  7. Fontoura, Maria Paula & Flôres Junior, Renato Galvão & Santos, Rogério Guerra, 2000. "Foreign Direct Investment Spillovers: What Can We Learn From Portuguese Data?," Economics Working Papers (Ensaios Economicos da EPGE) 366, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  8. Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages F723-39, November.
  9. Ari Kokko & Ruben Tansini & Mario Zejan, 1994. "Productivity spillovers from FDI in the Uruguayan manufacturing sector," Documentos de Trabajo (working papers) 0194, Department of Economics - dECON.
  10. Xiaming Liu & Pamela Siler & Chengqi Wang & Yingqi Wei, 2000. "Productivity Spillovers From Foreign Direct Investment: Evidence From UK Industry Level Panel Data," Journal of International Business Studies, Palgrave Macmillan, vol. 31(3), pages 407-425, September.
  11. Steven Globerman, 1979. "Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 42-56, February.
  12. Manuel Arellano, 1990. "Testing for Autocorrelation in Dynamic Random Effects Models," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 127-134.
  13. 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.
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