Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50112 
Year of Publication: 
2011
Series/Report no.: 
ESRI Working Paper No. 395
Publisher: 
The Economic and Social Research Institute (ESRI), Dublin
Abstract: 
This paper examines whether local firms benefit from the presence of foreign-owned firms in three Irish market-services sectors between 2001 and 2007. I investigate whether domestic firms differ in their ability to benefit from foreign presence using three different measures of absorptive capacity and also whether the foreign subsidiaries differ in their ability to generate spillovers. To account for the difficulty of productivity measurement in services, turnover-based, value-added-based and input-based productivity measures are employed. I find weak evidence of positive spillovers to domestic non-importers in the transport, storage and communication sector. In wholesale and retail trade, foreign presence is associated with lower capital-labour ratios and higher part-time-to-full-time employee ratios among domestic firms. In contrast, import competition is associated with higher productivity of the domestic firms in the transport, storage and communication and the business activities sector.
Subjects: 
foreign direct investment
absorptive capacity
services
productivity spillovers
JEL: 
F23
O33
L80
Document Type: 
Working Paper

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