Productivity Spillovers from Foreign MNEs on Domestic Manufacturing Firms: Is Co-Location Always a Plus?

32 Pages Posted: 9 Feb 2011

See all articles by Sergio Mariotti

Sergio Mariotti

Polytechnic University of Milan - Dipartimento di Ingegneria Gestionale

Marco Mutinelli

University of Brescia

Marcella Nicolini

University of Pavia - Department of Economics and Management

Lucia Piscitello

Politecnico di Milano - Dipartimento di Ingegneria gestionale

Date Written: February 7, 2011

Abstract

The paper analyses productivity spillovers from foreign MNEs on domestic manufacturing firms. Using a database on foreign MNEs in Italy, our results reveal that local firms do benefit from the presence of foreign MNEs, and the effect is higher when local and foreign firms in manufacturing sectors are co-located. However, spillovers benefiting domestic firms are likely to be less influenced by co-location when foreign MNEs are in services sectors as the latter are different from manufacturing industries under a number of aspects that overcome the effect of distance. Indeed, in these sectors, proximity and interaction are often obtained through professional mobility and temporary inter-organizational routines.

Keywords: Multinational Firms, Co-Location, Proximity, Spillover Effects, Customer-Supplier Interaction, Vertical Linkages

JEL Classification: D24, F23, O19, R30

Suggested Citation

Mariotti, Sergio and Mutinelli, Marco and Nicolini, Marcella and Piscitello, Lucia, Productivity Spillovers from Foreign MNEs on Domestic Manufacturing Firms: Is Co-Location Always a Plus? (February 7, 2011). FEEM Working Paper No. 6.2011. Available at SSRN: https://ssrn.com/abstract=1756752 or http://dx.doi.org/10.2139/ssrn.1756752

Sergio Mariotti

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

Piazza Leonardo da Vinci, 32
Milano, Milan 20133
Italy

Marco Mutinelli

University of Brescia ( email )

Piazza del Mercato, 15
25122 Brescia
Italy

Marcella Nicolini

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

Strada Nuova, 65
Pavia, 27100
Italy

Lucia Piscitello (Contact Author)

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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