2020
DOI: 10.1093/ej/ueaa003
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Climbing the Rungs of the Quality Ladder: FDI and Domestic Exporters in Romania

Abstract: This article argues that inflows of foreign direct investment can facilitate export upgrading in host countries. Using customs data merged with firm-level information for 2005–11, it shows a positive relationship between the quality of products exported by Romanian firms and the presence of multinational enterprises (MNEs) in the upstream (input-supplying) industries. Export quality is also positively related to MNE presence in the downstream (input-sourcing) industries and the same industry, but these relatio… Show more

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Cited by 35 publications
(15 citation statements)
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“…While very high levels of competition might be detrimental for firms' productivity and innovation orientation (Aghion et al, 2005), most markets and niches exhibit a positive relationship between the degree of market competition and innovation as a result of unlocking creative and entrepreneurial forces (Zehra and Garvis, 2000;Krammer, 2009) as well as a tighter coupling between firm structure and strategies (Burton and Obel, 2018), and in this case, HR policies and innovation strategy (Brusoni and Prencipe, 2013). In particular, the nature of competition from foreign-produced goods and services faced by firms shifts their focus from price considerations to technological sophistication and quality rationales (Fan et al, 2015;Bajgar and Javorcik, 2020). Subsequently, competitive environments (particularly from imported foreign products that usually have an technological edge) can trigger significant reactions from firms in terms of HRM and innovation strategies (Nocco et al, 2019;Traiberman, 2019).…”
Section: The Role Of the Competitive Environmentmentioning
confidence: 99%
“…While very high levels of competition might be detrimental for firms' productivity and innovation orientation (Aghion et al, 2005), most markets and niches exhibit a positive relationship between the degree of market competition and innovation as a result of unlocking creative and entrepreneurial forces (Zehra and Garvis, 2000;Krammer, 2009) as well as a tighter coupling between firm structure and strategies (Burton and Obel, 2018), and in this case, HR policies and innovation strategy (Brusoni and Prencipe, 2013). In particular, the nature of competition from foreign-produced goods and services faced by firms shifts their focus from price considerations to technological sophistication and quality rationales (Fan et al, 2015;Bajgar and Javorcik, 2020). Subsequently, competitive environments (particularly from imported foreign products that usually have an technological edge) can trigger significant reactions from firms in terms of HRM and innovation strategies (Nocco et al, 2019;Traiberman, 2019).…”
Section: The Role Of the Competitive Environmentmentioning
confidence: 99%
“…Today, a large part of Mozambique's metal sector stems from SMEs in Mozal's supplier network (Sutton et al 2014). The literature on FDI highlights that such linkages may facilitate learning spillovers and technology transfers, with the potential to help local firms develop export capabilities in other parts of the metal sector (Bajgar and Javorcik 2020;Eck and Huber 2016;Javorcik 2004;Javorcik et al 2018;Moran 2007;Newman et al 2015;Sørensen 2020).…”
Section: Target Productsmentioning
confidence: 99%
“…This might not capture other spillover effects such as those created between MNEs and their suppliers. Javorcik (), Bajgar and Javorcik () investigate the correlation between productivity of domestic firms and the presence of multinationals in downstream sectors. She finds positive productivity spillovers from FDI between foreign affiliates and their local suppliers but no evidence of externalities within the same industry.…”
Section: Regional Integration and Poverty: Review Of The Empirical Evmentioning
confidence: 99%