Which Firms Create Them and Which Firms Really Benefit? FDI Spillovers in New EU Member States

25 Pages Posted: 12 Apr 2010

See all articles by Marcella Nicolini

Marcella Nicolini

University of Pavia - Department of Economics and Management

Laura Resmini

Bocconi University - Department of Economics

Abstract

Using an unbalanced panel of firm-level data in Bulgaria, Poland and Romania, we examine the impact of foreign firms on domestic firms’ productivity. In particular, we try to answer the following research questions: (1) Are there any spillover effects of foreign direct investments (FDI), and if so, are they positive or negative? (2) Are spillover effects more likely to occur within or across sectors? (3) Are the existence, the direction and the magnitude of spillovers conditioned by sector and firm-specific characteristics? Our findings show that FDI spillovers exist both within and across sectors. The former arise when foreign firms operate in labour-intensive sectors, while the latter occur when foreign firms operate in high-tech sectors. Moreover, we find that domestic firm size conditions the exploitation of FDI spillovers even after controlling for absorptive capacity. We also detect a great deal of heterogeneity across countries consistent with the technology gap hypothesis.

Suggested Citation

Nicolini, Marcella and Resmini, Laura, Which Firms Create Them and Which Firms Really Benefit? FDI Spillovers in New EU Member States. Economics of Transition, Vol. 18, No. 3, pp. 487-511, July 2010. Available at SSRN: https://ssrn.com/abstract=1587091 or http://dx.doi.org/10.1111/j.1468-0351.2009.00379.x

Marcella Nicolini (Contact Author)

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

Strada Nuova, 65
Pavia, 27100
Italy

Laura Resmini

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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