FDI and the Consequences Towards More Complete Capture of Spillover Effects

37 Pages Posted: 24 Jan 2008

See all articles by Koen J. L. Schoors

Koen J. L. Schoors

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of General Economics

Bruno Merlevede

Ghent University - Department of General Economics

Date Written: August 2007

Abstract

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.

Keywords: FDI, spillovers, absorptive capability, firm size, ownership structure

JEL Classification: F2

Suggested Citation

Schoors, Koen J. L. and Merlevede, Bruno, FDI and the Consequences Towards More Complete Capture of Spillover Effects (August 2007). William Davidson Institute Working Paper No. 886, Available at SSRN: https://ssrn.com/abstract=1086187 or http://dx.doi.org/10.2139/ssrn.1086187

Koen J. L. Schoors (Contact Author)

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 265 35 99 (Fax)

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 264 35 99 (Fax)

Bruno Merlevede

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium

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