Multinational Corporations and Spillovers

Stockholm School of Economics WPS99-2/96

Posted: 20 Sep 1996

See all articles by Magnus Blomstrom

Magnus Blomstrom

Stockholm School of Economics - Department of Economics; National Bureau of Economic Research (NBER), at New York; Centre for Economic Policy Research (CEPR)

Ari Kokko

Stockholm School of Economics; National Bureau of Economic Research (NBER)

Date Written: Undated

Abstract

This paper examines spillover effects of the activities of multinational firms. Such effects are most likely to be found in host countries, where the operations of foreign multinationals may influence local firms in the MNCs own industry as well as firms in other industries. However, there is no comprehensive evidence on the exact nature or magnitude of these effects, although it is suggested that host country spillovers vary systematically between countries and industries. In particular, the positive effects of foreign investment are likely to increase with the level of local capability and competition. The spillovers to the home countries of MNCs are often more difficult to identify, for various reasons. Earlier studies suggest that the effects are generally positive, but the increasing international division of labor within multinationals complicates the analysis. The impact on the home country is likely to depend on what activities these firms concentrate at home.

JEL Classification: F23

Suggested Citation

Blomstrom, Magnus and Kokko, Ari, Multinational Corporations and Spillovers (Undated). Stockholm School of Economics WPS99-2/96. Available at SSRN: https://ssrn.com/abstract=4236

Magnus Blomstrom (Contact Author)

Stockholm School of Economics - Department of Economics ( email )

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National Bureau of Economic Research (NBER), at New York

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Centre for Economic Policy Research (CEPR)

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Ari Kokko

Stockholm School of Economics ( email )

P.O. Box 6501
Stockholm
Sweden
+46 8 736 9365 (Phone)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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