IDEAS home Printed from https://ideas.repec.org/p/kie/kieliw/1961.html
   My bibliography  Save this paper

Estimating Direct and Indirect Effects of Foreign Direct Investment on firm Productivity in the Presence of Interactions between Firms

Author

Listed:
  • Sourafel Girma
  • Yundan Gong
  • Holger Görg
  • Sandra Lancheros

Abstract

We implement a method to estimate the direct effects of foreign-ownership on foreign firms' productivity and the indirect effects (or spillovers) from the presence of foreign-owned firms on other foreign and domestic firms' productivity in a unifying framework, taking interactions between firms into account. To do so, we relax a fundamental assumption made in empirical studies examining a direct causal effect of foreign ownership on firm productivity, namely that of no interactions between firms. Based on our approach, we are able to combine direct and indirect effects of foreign ownership and calculate the total effect of foreign firms on local productivity. Our results show that all these effects vary with the level of foreign presence within a cluster, an important finding for the academic literature and policy debate on the benefits of attracting foreign owned firms

Suggested Citation

  • Sourafel Girma & Yundan Gong & Holger Görg & Sandra Lancheros, 2014. "Estimating Direct and Indirect Effects of Foreign Direct Investment on firm Productivity in the Presence of Interactions between Firms," Kiel Working Papers 1961, Kiel Institute for the World Economy.
    • Handle: RePEc:kie:kieliw:1961
    as

    Download full text from publisher

    File URL: https://www.ifw-members.ifw-kiel.de/publications/estimating-direct-and-indirect-effects-of-foreign-direct-investment-on-firm-productivity-in-the-presence-of-interactions-between-firms/KWP_1961.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    foreign direct investment; treatment effects; SUTVA; propensity score matching;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1961. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dieter Stribny (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.