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Do Ukrainian firms benefit from FDI

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  • Lutz, Stefan H.
  • Talavera, Oleksandr

Abstract

All countries are eager to attract as much foreign investments as possible. At the same time FDI may have not only positive, but also negative economic effects for receiving countries. Positive effects are associated with technology transfer, efficient allocation of resources, and training of domestic workers. However, the entry of foreign firms could, e.g., lead to a decrease of labor productivity at domestic firms, which is a negative effect. The main purpose of this paper is to estimate direct and indirect effects of FDI. First, we test for direct influence of foreign direct investments on firms’ performance, where the latter is estimated alternatively as labor productivity and as exports. FDI notably increases both labor productivity and export volumes. Second, we look for spillover or indirect effects. There is statistical evidence that the levels of FDI in certain regional industries are associated with higher performance indicators of firms’ not receiving FDI in those same regional industries.

Suggested Citation

  • Lutz, Stefan H. & Talavera, Oleksandr, 2003. "Do Ukrainian firms benefit from FDI," ZEI Working Papers B 04-2003, University of Bonn, ZEI - Center for European Integration Studies.
  • Handle: RePEc:zbw:zeiwps:b042003
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    17. repec:hhs:iuiwop:553 is not listed on IDEAS
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    Cited by:

    1. Stefan Lutz & Oleksandr Talavera & Sang-Min Park, 2008. "Effects of Foreign Presence in a Transition Economy: Regional and Industrywide Investments and Firm-Level Exports in Ukrainian Manufacturing," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(5), pages 82-98, September.
    2. Galina Hale & Cheryl Long, 2011. "Are There Productivity Spillovers From Foreign Direct Investment In China?," Pacific Economic Review, Wiley Blackwell, vol. 16(2), pages 135-153, May.
    3. Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 640-655, August.
    4. Galina Hale & Cheryl Long, 2006. "What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China," Working Papers 934, Economic Growth Center, Yale University.
    5. Stefan Lutz & Oleksandr Talavera, 2004. "Do Ukrainian Firms Benefit from FDI?," Economic Change and Restructuring, Springer, vol. 37(2), pages 77-98, June.
    6. Ichiro IWASAKI & Satoshi MIZOBATA, 2018. "Post-Privatization Ownership And Firm Performance: A Large Meta-Analysis Of The Transition Literature," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 263-322, June.
    7. Pradhan, Jaya Prakash, 2007. "How Do Indian Multinationals Affect Exports from Home Country?," MPRA Paper 19022, University Library of Munich, Germany.
    8. Galina Hale & Cheryl Long, 2006. "FDI spillovers and firm ownership in China: labor markets and backward linkages," Working Paper Series 2006-25, Federal Reserve Bank of San Francisco.
    9. Pradhan, Jaya Prakash & Das, Keshab & Paul, Mahua, 2006. "Export-orientation of Foreign Manufacturing Affiliates in India: Factors, Tendencies and Implications," MPRA Paper 12338, University Library of Munich, Germany.
    10. Anagaw Derseh Mebratie & Peter A. G. van Bergeijk, 2013. "Firm heterogeneity and development: A meta-analysis of FDI productivity spillovers," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 53-74, February.
    11. Alyson Ma, 2006. "Export Spillovers to Chinese Firms: Evidence from Provincial Data," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(2), pages 127-149.
    12. Stefan Lutz & Oleksandr Talavera & Sang-Min Park, 2008. "Effects of Foreign Presence in a Transition Economy: Regional and Industrywide Investments and Firm-Level Exports in Ukrainian Manufacturing," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 44(5), pages 82-98, September.
    13. Anagaw Derseh Mebratie & Arjun S. Bedi, 2013. "Foreign direct investment, black economic empowerment and labour productivity in South Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 103-128, February.

    More about this item

    Keywords

    Foreign direct investment; firm performance; spillovers; Ukraine;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • F2 - International Economics - - International Factor Movements and International Business

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