The Impact of Foreign Mnes in Service Sectors on Productivity of Local Manufacturing Firms: Vertical Linkages and Spillovers

41 Pages Posted: 11 Jan 2010

See all articles by Marcella Nicolini

Marcella Nicolini

University of Pavia - Department of Economics and Management

Sergio Mariotti

Polytechnic University of Milan - Dipartimento di Ingegneria Gestionale

Lucia Piscitello

Politecnico di Milano - Dipartimento di Ingegneria gestionale

Date Written: January 11, 2010

Abstract

This paper deals with forward and backward linkages stemming from foreign multinational enterprises (MNEs) in services sectors and their impact on the productivity of local manufacturing firms. We distinguish between pecuniary and technological spillovers. Using a database on foreign MNEs in service sectors in Italy, over the 1999-2005 period, we find that pecuniary spillovers positively influence local manufacturing firms through forward and backward linkages, provided that foreign MNEs contribute to increasing competition in the local relevant service sector. Likewise, technological spillovers impact local manufacturing firms according to the latter absorptive capacity and capabilities. We claim also that the foreign involvement of the local manufacturing firms acts as a moderating factor for the transmission of spillovers.

Keywords: MNE-Host country relations, FDI, Knowledge and productivity spillovers

JEL Classification: C23, D24, F23

Suggested Citation

Nicolini, Marcella and Mariotti, Sergio and Piscitello, Lucia, The Impact of Foreign Mnes in Service Sectors on Productivity of Local Manufacturing Firms: Vertical Linkages and Spillovers (January 11, 2010). Available at SSRN: https://ssrn.com/abstract=1534587 or http://dx.doi.org/10.2139/ssrn.1534587

Marcella Nicolini (Contact Author)

University of Pavia - Department of Economics and Management ( email )

Strada Nuova, 65
Pavia, 27100
Italy

Sergio Mariotti

Polytechnic University of Milan - Dipartimento di Ingegneria Gestionale ( email )

Piazza Leonardo da Vinci, 32
Milano, Milan 20133
Italy

Lucia Piscitello

Politecnico di Milano - Dipartimento di Ingegneria gestionale ( email )

20113 Milan, Milano
Italy

HOME PAGE: http://www.dig.polimi.it/eng/comunita/cl.php?id=51

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