Foreign firms and host-country productivity : does the mode of entry matter?
Working paper
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Date
2006-01Metadata
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- Discussion papers (SAM) [662]
Abstract
Foreign direct investment is often considered an important source
of knowledge spillovers. However, results from the empirical literature
relating overall foreign presence to host country productivity are
ambiguous. We argue that this may be because different modes of
entry may have different effects on productivity. Using 24 years of
comprehensive panel data for Norwegian Manufacturing, we find that
greenfield entry has a negative impact on the productivity growth of
domestic plants, while entry via acquisition affects local productivity
positively. The net effect is a small positive effect of an overall change in foreign presence on local productivity growth.
Publisher
Norwegian School of Economics and Business Administration. Department of EconomicsSeries
Discussion paper2006:2