Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?

Görg, Holger; Greenaway, David

doi:10.1093/wbro/lkh019

Cited by 1,147 publications

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“…On the other hand, outward FDI is associated with a reduction in demand for unskilled and sometimes skilled labour This review is by no means exhaustive. For more systematic reviews see, for example, Görg & Strobl (2001) and Görg & Greenaway (2004) for a meta-analysis of earlier literature on multinational companies and productivity spillovers, Caves (2007) for a comprehensive discussion of the theory of international firms, Contessi & Weinberger (2009) for an insightful overview of empirical literature on FDI and growth, Hofmann (2013) for an extensive discussion of theoretical and empirical literature on determinants and effects of FDI, and Alfaro (2017) for a recent review of micro and macro approaches to identifying gains from FDI. 321 Contessi, De Pace & Francis (2013) show that FDI inflows are pro-cyclical in developed countries and countercyclical in developing countries, so pooling all countries together would not reveal any pattern of cyclicality.…”

Section: Empirical Evidencementioning

confidence: 99%

“…They also found some evidence of publication bias, suggesting that studies that indicated statistically significant effects of foreign presence on productivity spillovers were more likely to be published. A few years later, a separate review by Görg & Greenaway (2004) on productivity, wage and export spillovers found that 'robust empirical support for positive spillovers is at best mixed'. 326 The study cited data imperfections, inadequate statistical methods, heterogeneity and the possibility that productivity spillovers may be very small in reality as possible explanations behind the mixed results in the empirical literature.…”

Section: Evidence From Cross-country Studiesmentioning

confidence: 99%

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After Brexit: Alternate forms of Brexit and their implications for the United Kingdom, the European Union and the United States

Ries¹,

Hafner²,

Smith³

et al. 2017

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For more information on this publication, visit www.rand.org/t/RR2200Published by the RAND Corporation, Santa Monica, Calif., and Cambridge, UK © Copyright 2017 RAND CorporationR® is a registered trademark.RAND Europe is a not-for-profit research organisation that helps to improve policy and decision making through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors. Limited Print and Electronic Distribution RightsThis document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. Support RANDMake a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org www.randeurope.org i In a referendum on 23 June 2016, the British public voted to begin a process of withdrawing from the European Union. Since World War II, no developed country has decided to leave such a major international institution without a military defeat or political revolution. The Brexit negotiations are therefore likely to bring great uncertainty to both the UK and the EU.This study examines the processes and issues involved in the Brexit negotiations, and explores the implications of possible outcomes for the UK, the European Union and the United States. It draws upon formal negotiating positions and mandates adopted, but with the expectation that a wider array of concerns will come into play as the process develops. The study uses game theory insights to explore and create a better understanding of how a wide variety of factors might affect the outcome of the negotiations. The use of modelling and game theory modes of analysis illuminates the broader issues at play, at some remove from the day-to-day drama of the UK's negotiations with the European Union.We also model the potential economic implications of various options for a post-Brexit relationship between the UK and EU. Specifically, the study examines the economic effect of five 'hard Brexit' options: an arrangement in which UK trade is governed by WTO rules, including the application of most-favoured-nation tariffs; the successful negotiation of a UK-EU free trade agreement (FTA); the creation of a UK-EU-US FTA based on the proposed Transatlantic Trade and Investment Partnership; the creation of a US-UK FTA excluding the EU; and an extended transition period during which EU and UK tariffs do not change but other non-tariff barriers to trade come into effect. In addition, we examine three 'soft Brexit' scenarios: the Norwegian model (membership of the European Economic Area), the Swiss model (a series of bilateral agree...

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Section: Empirical Evidencementioning

confidence: 99%

Section: Evidence From Cross-country Studiesmentioning

confidence: 99%

After Brexit: Alternate forms of Brexit and their implications for the United Kingdom, the European Union and the United States

Ries¹,

Hafner²,

Smith³

et al. 2017

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“…In particular, HP jrt is an index of horizontal penetration, capturing the intra-industry presence of MNEs and calculated as the ratio of multinational employees over total employment in the considered industry j, region r and year t. The index BP jrt measures the foreign presence in industries from which industry j's domestic firms are sourcing their inputs, thus accounting for forward linkages from MNEs to domestic firms. It is computed as the weighted sum of the horizontal penetration figures of all the suppliers' industries, according 28 In their survey Gorg and Greenaway (2004) discuss the inconclusive evidence emerging from several empirical contributions analyzing various channels of MNEs' spillovers. to the formula BP jrt = P k (if k6 =j) α jk HP krt , where α jk is the proportion of industry j's total inputs sourced from industry k, an information retrieved from the 1998 Romanian Input-Output Matrix. Analogously, the index F P jrt measures the presence of multinationals' affiliates in industries which are sourcing inputs from sector j, thus accounting for backward linkages from MNEs to domestic firms.…”

Section: The Long-run Dynamics Of Regional Growthmentioning

confidence: 99%

Firm heterogeneity and endogenous regional disparities

Altomonte¹,

Colantone²

2008

Journal of Economic Geography

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractWe exploit the census of Romanian firms to provide a microfounded analysis of the sources of regional disparities in the country. To this extent, we adapt to the regional case a decomposition of firm-level output dynamics based on semi-parametric productivity estimates.The methodology, robust to different techniques of TFP estimation, allows us to analyze the sources of regional disparities controlling for the heterogeneity in firms' characteristics.In particular, we measure various compositional effects of multinational enterprises (MNEs) on regional growth, finding that regional disparities are to a large extent endogenous to the interaction between firm-level dynamics and initial market conditions.

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“…2 While the firm-and plant-level literature finds a robust positive relationship in levels between foreign ownership and own productivity, the evidence on the effect of foreign-owned firms on domestic firms productivity is mixed (Görg and Greenaways, 2004), and therefore I omit these effects in the rest of the paper.…”

Section: Introductionmentioning

confidence: 99%

Multinational Firms' Entry and Productivity: Some Aggregate Implications of Firm-level Heterogeneity

Contessi¹

2015

gwp

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Despite the microeconomic evidence supporting the superior idiosyncratic productivity of multinational firms (MNFs) and their affiliates, cross-country studies fail to find robust evidence of a positive relationship between foreign direct investment and growth. In order to study the aggregate implications of MNFs entry and production, I develop a dynamic general equilibrium model with firm heterogeneity where MNFs sort according to their own productivity. The entry and production of MNFs contribute to aggregate productivity growth at decreasing rates and affect domestic producers through general equilibrium effects in the labor market. I argue that the heterogeneous composition of the population of affiliates can help explain the conflicting evidence on the impact of foreign direct investment on growth.JEL codes: F21, F23, F41, F42

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Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?

Cited by 1,147 publications

References 97 publications

After Brexit: Alternate forms of Brexit and their implications for the United Kingdom, the European Union and the United States

After Brexit: Alternate forms of Brexit and their implications for the United Kingdom, the European Union and the United States

Firm heterogeneity and endogenous regional disparities

Multinational Firms' Entry and Productivity: Some Aggregate Implications of Firm-level Heterogeneity

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