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FDI and the Consequences Towards more complete capture of spillover effects

  • B. MERLEVEDE

    ()

  • K. SCHOORS

    ()

We analyze productivity spillovers of FDI on domestic companies, both within and across industries. In the identification of intraindustry spillovers, we separate out labor market effects from other effects. Interindustry spillovers are identified through upstream, downstream, and supply-backward linkage effects. Dynamic input output tables are used to construct the linkages. For a panel of Romanian firms, we find evidence that labor market effects differ from other intraindustry effects. Spillovers across industries dominate those within industries. The supply-backward effect behaves as predicted by theory. Firm-specific level of technology, firm size, and ownership structure are all found to affect spillovers.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 06/372.

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Length: 43 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:rug:rugwps:06/372
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Web page: http://www.ugent.be/eb

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