Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/3668
Authors: 
Girma, Sourafel
Görg, Holger
Year of Publication: 
2005
Series/Report no.: 
Kiel Working Paper 1248
Abstract: 
This paper focuses on the role of absorptive capacity in determining whether or not domestic firms benefit from productivity spillovers from FDI using establishment level data for the UK. We allow for different effects of FDI on establishments located at different quantiles of the productivity distribution by using conditional quantile regression. Overall, while there is some heterogeneity in results across sectors and quantiles, our findings clearly suggest that absorptive capacity matters for productivity spillover benefits. We find evidence for a u-shaped relationship between productivity growth and FDI interacted with absorptive capacity. We also analyse in some detail the impact of changes in absorptive capacity on establishments' ability to benefit from spillovers.
Subjects: 
Absorptive capacity
Productivity spillovers
Quantile regressions
Foreign direct investment
JEL: 
F21
F23
Document Type: 
Working Paper

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