IDEAS home Printed from https://ideas.repec.org/p/por/fepwps/444.html
   My bibliography  Save this paper

Foreign Presence and Market Concentration: The Case of Portuguese Manufacturing Industries

Author

Listed:
  • Rosa Forte

    () (CEF.UP, Faculdade de Economia, Universidade do Porto)

  • Paula Sarmento

    () (CEF.UP, Faculdade de Economia, Universidade do Porto)

Abstract

The impact of foreign direct investment (FDI) on host country market concentration has been a controversial issue, both at the theoretical and the empirical levels. Most existing empirical studies point to a positive relationship, enhancing the negative effects of FDI on competition conditions, but there are also studies that support the argument that FDI reinforces competition. In this paper we analyze the impact of FDI on market concentration considering the Portuguese manufacturing industries in the period 2006-2009. Using panel data estimation we found a significant negative impact of FDI on industry concentration, which is in line with the results of other studies for developed countries, and gives support to arguments that FDI has positive effects on domestic firms, eventually through positive externalities.

Suggested Citation

  • Rosa Forte & Paula Sarmento, 2012. "Foreign Presence and Market Concentration: The Case of Portuguese Manufacturing Industries," FEP Working Papers 444, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:444
    as

    Download full text from publisher

    File URL: http://www.fep.up.pt/investigacao/workingpapers/wp444.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Koen De Backer & Leo Sleuwaegen, 2003. "Does Foreign Direct Investment Crowd Out Domestic Entrepreneurship?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 67-84, February.
    2. Haller, Stefanie A., 2009. "The impact of multinational entry on domestic market structure and investment," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 52-62, January.
    3. Roger Bandick, 2010. "Multinationals and plant survival," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(4), pages 609-634, December.
    4. Sanjaya Lall, 1979. "Multinationals and market structure in an open developing economy: The case of Malaysia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 115(2), pages 325-350, June.
    5. Salvador Barrios & Holger Görg & Eric Strobl, 2016. "Foreign direct investment, competition and industrial development in the host country," World Scientific Book Chapters,in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 18, pages 323-346 World Scientific Publishing Co. Pte. Ltd..
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    7. Willmore, Larry, 1989. "Determinants of industrial structure: A Brazilian case study," World Development, Elsevier, vol. 17(10), pages 1601-1617, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rosa Portela Forte, 2016. "Multinational firms and host country market structure: A review of empirical literature," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(2), pages 240-265, March.

    More about this item

    Keywords

    Foreign Direct Investment; Market Concentration; Panel Data;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    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:por:fepwps:444. 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: http://edirc.repec.org/data/fepuppt.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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

    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.