Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212782
Authors: 
Merlevede, Bruno
Schoors, Koen
Spatareanu, Mariana
Year of Publication: 
2013
Series/Report no.: 
BOFIT Discussion Papers No. 27/2013
Abstract: 
This study measures the effect of foreign direct investment (FDI) on the productivity of local firms. Unlike earlier studies, our empirical approach does not require that FDI manifests immediate or permanent effects. We find that foreign entry initially affects productivity of local competitors negatively, but is more than offset by a permanent positive effect on local competitors once majority-foreign-owned firms have been present for a while. The effect on the productivity of local suppliers, in contrast, is transient. The entry of majority-foreign-owned firms boosts productivity of local suppliers after a short adaption period, but then fades. The positive impact of minority-foreign-owned firms on local suppliers is immediate, but smaller and transient.
Subjects: 
FDI
spillovers
dynamics
timing
JEL: 
F2
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-46-2
Document Type: 
Working Paper

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