Demonstration or Congestion? Export Spillovers in Sweden

University of Nottingham Research Paper No. 2005/44

59 Pages Posted: 16 Dec 2005

See all articles by Patrik Karpaty

Patrik Karpaty

University of Nottingham; Örebro University

Richard Kneller

University of Nottingham

Date Written: 2005

Abstract

A key feature of the Swedish economy over the last decade and a half has been the rapid internationalisation of its economy, both through FDI and trade. In this paper we consider the relationship between these two trends: whether the effect of increased inward FDI on exports by domestic firms may be positive or negative. The first case may occur as a result of demonstration effects. The second may reveal congestion effects. We also consider whether FDI affect the sunk costs or variable costs of exporting. Our results indicate that congestion effects dominate since increased inward FDI has led to a significant reduction in the probability of export market participation.

Keywords: FDI, export spillovers, export platforms

JEL Classification: F13, F23

Suggested Citation

Karpaty, Patrik and Kneller, Richard, Demonstration or Congestion? Export Spillovers in Sweden (2005). University of Nottingham Research Paper No. 2005/44. Available at SSRN: https://ssrn.com/abstract=870237 or http://dx.doi.org/10.2139/ssrn.870237

Patrik Karpaty (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Örebro University ( email )

Sköldvägen 6 151 53 Södertälje
SE-70182 Orebro
Sweden

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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