Mutual Productivity Spillovers in Slovakia: Absorptive Capacity, the Technology Gap, and Nonlinear Effects

Abstract

This article analyzes traditional productivity spillovers from foreign to local firms and reverse productivity spillovers from local to foreign firms. It argues that the extent of mutual productivity spillovers depends on absorptive capacity and the technology gap. The authors’ hypotheses were tested with panel data on Slovak firms for the period 2003–12. Traditional productivity spillovers through output were found to be positive, but the spillover effects through capital were mostly negative. The effect of the technology gap on productivity spillovers was conducive. Nonlinear effects were found in services and high-tech industries. Reverse productivity spillovers through capital were positive in the manufacturing industries.

Keywords:

• foreign direct investment
• mutual spillovers
• productivity spillovers
• Slovakia
• technology gap

JEL Classification:

• F21
• F23
• D24

ACKNOWLEDGMENTS

We would like to thank Lorraine Lee and Jessica Moore for their excellent research assistance and Brent Burmester and Alex Eapen for their comments on the earlier draft of this article.

Additional information

Notes on contributors

Elena Jayne Jacobs

Elena Jayne Jacobs was a postgraduate student in the University of Auckland Business School, Auckland, New Zealand. She is currently a Partner Development Manager at ECi Naverisk. Peter Zámborský is a Senior Lecturer in International Business and Strategy at the University of Auckland Business School, Auckland, New Zealand. Erwann Sbai is a Senior Lecturer in the Department of Economics, University of Auckland Business School, Auckland, New Zealand.

Peter Zámborský

Elena Jayne Jacobs was a postgraduate student in the University of Auckland Business School, Auckland, New Zealand. She is currently a Partner Development Manager at ECi Naverisk. Peter Zámborský is a Senior Lecturer in International Business and Strategy at the University of Auckland Business School, Auckland, New Zealand. Erwann Sbai is a Senior Lecturer in the Department of Economics, University of Auckland Business School, Auckland, New Zealand.

Erwann Sbai

Elena Jayne Jacobs was a postgraduate student in the University of Auckland Business School, Auckland, New Zealand. She is currently a Partner Development Manager at ECi Naverisk. Peter Zámborský is a Senior Lecturer in International Business and Strategy at the University of Auckland Business School, Auckland, New Zealand. Erwann Sbai is a Senior Lecturer in the Department of Economics, University of Auckland Business School, Auckland, New Zealand.