https://orcid.org/0000-0001-6638-8771
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ABSTRACT
This paper presents new empirical evidence on the impact of foreign direct investment (FDI) technology spillovers on the productivity of domestic firms in manufacturing and services in Central and East European regions over the period 2007–11. The complex impact of FDI is separated into direct and indirect effects while accounting for spatial feedback effects. Findings suggest that FDI presence generates negative intra- and interregional market-stealing effects on direct rivals and positive spillovers on downstream firms. The effects are larger from FDI in neighbouring regions and increase with distance.
DISCLOSURE STATEMENT
No potential conflict of interest was reported by the authors.
Notes
1. Separating knowledge spillovers and competition effects from FDI would require information on firms’ position in product market and technology space (Bloom, Schankerman, & van Reenen, Citation2013). However, such an approach requires detailed data not available in the data set.
2. See Appendix A in the supplemental data online for a detailed description of the data set (Figures A1 and A2), its summary statistics (Table A2) and representativeness (Tables A3–A5).
3. The advantage of this estimator over conventional ones is discussed in greater length in section A1 in Appendix A in the supplemental data online.
4. When calculating the horizontal spillover measure, we included all firms in the database regardless of whether or not they were included in the TFP estimation. In the estimation of the latter, we followed the data-cleaning strategy described in section A1 in Appendix A in the supplemental data online.
5. In Amadeus, the intangible fixed assets are capitalized and encompass R&D expenditures, patents, copyrights, software, employee training, trademarks and expenditures on similar costs. Other components such as computerized information, organizational capital and economic competencies are more difficult to estimate, which represents a major challenge in quantifying productivity effects of intangibles. In addition, certain components of intangibles can be complements or substitutes, which may further mask their effects on productivity.
