Tough Love: Do Czech Suppliers Learn from Their Relationships with Multinationals?

23 Pages Posted: 15 Dec 2009

See all articles by Beata Smarzynska Javorcik

Beata Smarzynska Javorcik

University of Oxford - Department of Economics; World Bank - Development Research Group (DECRG); Centre for Economic Policy Research (CEPR)

Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs

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Abstract

Countries strive to attract foreign direct investment hoping that knowledge brought by multinationals will spill over to domestic producers. While the literature has cast doubt on the existence of spillovers within industries, it has found evidence of spillovers from multinationals to the supplying sectors. However, the existing studies rely on industry-level proxies rather than information on actual relationships between suppliers and multinationals. This study goes one step further by employing a unique dataset from the Czech Republic where such relationships can be identified. It finds evidence consistent with both high productivity firms having a higher probability of supplying multinationals as well as suppliers learning from their relationships with multinationals.

Suggested Citation

Javorcik, Beata Smarzynska and Spatareanu, Mariana, Tough Love: Do Czech Suppliers Learn from Their Relationships with Multinationals?. Scandinavian Journal of Economics, Vol. 111, Issue 4, pp. 811-833, December 2009, Available at SSRN: https://ssrn.com/abstract=1521837 or http://dx.doi.org/10.1111/j.1467-9442.2009.01591.x

Beata Smarzynska Javorcik (Contact Author)

University of Oxford - Department of Economics ( email )

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Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs ( email )

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