Spillovers from Agglomerations and Inward FDI. A Multilevel Analysis on SSA Domestic Firms

36 Pages Posted: 2 Jul 2014

See all articles by Marco Sanfilippo

Marco Sanfilippo

University of Antwerp - Institute of Development Policy and Management

Adnan Seric

United Nations Industrial Development Organization (UNIDO)

Date Written: July 2014

Abstract

This paper adopts multilevel analysis to analyze the agglomeration-performance nexus for domestic firms in Sub-Saharan Africa. We show that contextual factors such as country, city and industry together explain up to 30% of the variance in firms’ productivity. Our results show also that African firms can take advantage from agglomeration externalities when they locate in cities more densely populated by firms specialized in different sectors (urbanization economies), while their performance worsen when they face direct competition from firms in the same industry. These effects are similar in the services and the manufacturing industries, even if in the latter positive spillovers are found to be conditional to the presence of backward and foreign linkages with nearby firms. Finally, we are also able to show that these effects are magnified when domestic firms locate close to foreign multinationals, especially those coming from the South.

Keywords: Agglomeration economies; Firms’ heterogeneity; Sub-Saharan Africa

JEL Classification: D22; F23; O14

Suggested Citation

Sanfilippo, Marco and Seric, Adnan, Spillovers from Agglomerations and Inward FDI. A Multilevel Analysis on SSA Domestic Firms (July 2014). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2014/76. Available at SSRN: https://ssrn.com/abstract=2461195 or http://dx.doi.org/10.2139/ssrn.2461195

Marco Sanfilippo (Contact Author)

University of Antwerp - Institute of Development Policy and Management ( email )

City campus building S
Lange Sint Annastraat 7
Antwerp, 2000
Belgium

Adnan Seric

United Nations Industrial Development Organization (UNIDO) ( email )

Wagramer Strasse 5
P.O. Box 300
Vienna, A-1400
Austria

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