Effects of Foreign Presence in a Transition Economy: Regional and Industry-Wide Investments and Firm-Level Exports in Ukrainian Manufacturing

Emerging Markets Finance & Trade, Vol. 44, No. 5, pp. 82–98, 2008

Posted: 16 May 2009

See all articles by Stefan Lutz

Stefan Lutz

Lutz-Econ; HMKW University

Oleksandr Talavera

University of Birmingham

Sang-Min Park

Marburg Center for Institutional Economics (MACIE); University of Kassel

Date Written: September-October 2008

Abstract

We investigate the effects of regional and industrywide foreign presence and foreign direct investment (FDI) on the export volumes of Ukrainian manufacturing firms using unpublished panel data from 1996-2000. Foreign presence through FDI may have negative competition effects on domestic firms’ performance; at the same time, domestic firms’ productivity may be increased by technology transfer or training and demonstration effects. From a Cournot competition model that includes negative competition and positive technology spillover effects, we hypothesize that foreign presence and FDI might positively affect domestic firms’ output and exports. Our estimation results support these hypotheses, suggesting in particular that large firms and durable goods producers benefit most from foreign presence and investments.

Keywords: firm performance, foreign direct investment, spillovers, transition

JEL Classification: L, F

Suggested Citation

Lutz, Stefan and Lutz, Stefan and Talavera, Oleksandr and Park, Sang-Min and Park, Sang-Min, Effects of Foreign Presence in a Transition Economy: Regional and Industry-Wide Investments and Firm-Level Exports in Ukrainian Manufacturing (September-October 2008). Emerging Markets Finance & Trade, Vol. 44, No. 5, pp. 82–98, 2008, Available at SSRN: https://ssrn.com/abstract=1405223

Stefan Lutz (Contact Author)

Lutz-Econ ( email )

Ringstrasse 6
Gernsheim, Hessen 64579
Germany
+4915146672069 (Phone)

HOME PAGE: http://lutz-econ.de

HMKW University ( email )

Department of Economics
Solmsstrasse 6
Frankfurt, Hessen 60486
Germany
+4915146672069 (Phone)

HOME PAGE: http://https://www.hmkw.de/

Oleksandr Talavera

University of Birmingham ( email )

Edgbaston, Birmingham B15 2TT
United Kingdom

Sang-Min Park

Marburg Center for Institutional Economics (MACIE) ( email )

Universitätsstrasse 24
D-35032 Marburg, D-35032
Germany

University of Kassel ( email )

Fachbereich 07
Nora-Platiel-Straße 4-6
34109 Kassel, 34127
Germany

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