Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83355
Authors: 
Galeotti, Elisa
Year of Publication: 
2008
Series/Report no.: 
IES Working Paper 20/2008
Abstract: 
This paper analyzes the effects of geographical proximity and agglomeration of FDIs (foreign direct investments) on domestic firms in the privatized glass sector in the Czech Republic. The motivation for this research is based on the scant evidence in Central and Eastern Europe of the effects of geographical proximity and agglomeration on the productivity of domestic firms. This study aims to explain how spillovers are transferred from FDIs to domestic firms. The econometrical analysis, using original panel data from 1990 to 2006, provides evidence that the agglomeration of FDIs has a negative and significant effect on the productivity of domestic firms in the glass sector at a 5% level. The effect of geographical proximity to FDIs is significant at a 10% level but not in all models. The results support the importance of geographic proximity and agglomeration of FDIs and conform with the evidence that shows that FDIs have produced negative spillovers on domestic firms in transition countries.
Subjects: 
foreign direct investments
agglomeration economies
panel data
regional location
Czech Republic
glass industry
JEL: 
C23
F21
F23
L61
O18
R12
Document Type: 
Working Paper
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