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Productivity Spillovers from Multinational Corporations in Portugal: Vulnerability to Deficient Estimation


Isabel Maria Dias Proenca


Technical University of Lisbon (UTL) - School of Economics and Management

Maria Paula Fontoura


Technical University of Lisbon (UTL) - Department of Economics; UECE - Research Unit on Complexity in Economics

Nuno Crespo


Technical University of Lisbon (UTL) - Department of Economics

August 20, 2008

Applied Econometrics and International Development, Vol. 6, No. 1, 2006

Abstract:     
Evidence on productivity spillovers from FDI to domestic firms is ambiguous. Incorrect estimation procedures may be one of the sources for the contradictory results obtained in empirical studies on this subject. We observe that inadequacy of the estimation procedures leads to a severe underestimation of the spillover effect. An appropriated econometric methodology is discussed taking into consideration the possible simultaneity of FDI and other explanatory variables and endogeneity related to firm unobserved heterogeneity. Robust inference is also addressed. Our findings for the Portuguese case seem sufficient clear to warn about spillover results obtained with a non-judicious application of the classical panel data methods.

Number of Pages in PDF File: 12

Keywords: Domestic firm productivity, Multinational corporation, Technological spillovers, Panel data, Extended GMM, Portugal

JEL Classification: F21, F23, O52

Accepted Paper Series


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Date posted: August 20, 2008  

Suggested Citation

Dias Proenca, Isabel Maria and Fontoura, Maria Paula and Crespo, Nuno, Productivity Spillovers from Multinational Corporations in Portugal: Vulnerability to Deficient Estimation (August 20, 2008). Applied Econometrics and International Development, Vol. 6, No. 1, 2006. Available at SSRN: http://ssrn.com/abstract=1240508

Contact Information

Isabel Maria Dias Proenca (Contact Author)
Technical University of Lisbon (UTL) - School of Economics and Management ( email )
R. Miguel Lupi, 20
Lisbon, 1200
Portugal
Maria Paula Fontoura
Technical University of Lisbon (UTL) - Department of Economics ( email )
R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal
UECE - Research Unit on Complexity in Economics ( email )
ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal
Nuno Crespo
Technical University of Lisbon (UTL) - Department of Economics ( email )
R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal
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