Working Paper: CEPR ID: DP2586
Authors: Jozef Konings
Abstract: This paper uses firm level panel data to investigate empirically the effects of direct foreign investment (DFI) on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe, Bulgaria, Romania and Poland. To this end a unique firm level panel data set is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) Do foreign firms perform better than their domestic counterparts? (2) Do foreign firms generate spillovers to domestic firms?
Keywords: emerging countries; foreign investment; panel data; spillovers
JEL Codes: 052; D24; F14; P31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Foreign firms' presence in sector (F23) | Foreign firms' benefits (F23) |
| Foreign ownership (F23) | Productivity performance (O49) |
| Increased competition from foreign firms (F23) | Average costs for domestic firms (D22) |
| Increased competition from foreign firms (F23) | Productivity of domestic firms (D22) |