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Spatial decisions of multinational enterprises and their effect on local firms

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  • Ehnts, Dirk H.

Abstract

Since the 1980s empirical research has been conducted on the influence of MNEs on local firms. The spillovers predicted by growth theory models used in the research designs have not been found. The main result is the importance of increased competition for the productivity of local firms. When FDI flows expanded rapidly in the 1990s, it became clear that MNEs play an important role in international technology transfer. However, growth theory models are limited in that market structures and firms cannot be modeled explicitly. The New Economic Geography (NEG) is better equipped to handle these issues. Instead of spillovers it relies on linkages. Therefore, new insights might be gained by basing empirical research on a NEG model and looking for linkages among firms.

Suggested Citation

  • Ehnts, Dirk H., 2004. "Spatial decisions of multinational enterprises and their effect on local firms," Violette Reihe: Schriftenreihe des Promotionsschwerpunkts "Globalisierung und Beschäftigung" 20/2004, University of Hohenheim, Carl von Ossietzky University Oldenburg, Evangelisches Studienwerk.
    • Handle: RePEc:zbw:hohpro:y2004i20p1-27
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    More about this item

    Keywords

    New Economic Geography; Foreign Direct Investment; Multinational Enterprises;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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