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Does distance matter in spillover?1

Does distance matter in spillover?1 Our aim in this paper is twofold: to find whether FDI causes horizontal or vertical productivity spillovers to domestically‐owned Hungarian manufacturing firms, and to see if distance matters in spillovers. For this exercise we use a large panel of Hungarian firms and different panel models. Consistently with previous research, at the country level, we find positive vertical spillovers but no evidence of positive horizontal spillovers. By taking distance into consideration, however, we find positive horizontal spillovers for domestic firms close to foreign‐owned firms. By constructing spillover measures weighted by distance, we find similar patterns. Our results underline the importance of labour market rigidity and the local nature of knowledge in the case of horizontal spillovers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics of Transition and Institutional Change Wiley

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References (74)

Publisher
Wiley
Copyright
Copyright © 2007 Wiley Subscription Services, Inc., A Wiley Company
ISSN
2577-6975
eISSN
2577-6983
DOI
10.1111/j.1468-0351.2007.00308.x
Publisher site
See Article on Publisher Site

Abstract

Our aim in this paper is twofold: to find whether FDI causes horizontal or vertical productivity spillovers to domestically‐owned Hungarian manufacturing firms, and to see if distance matters in spillovers. For this exercise we use a large panel of Hungarian firms and different panel models. Consistently with previous research, at the country level, we find positive vertical spillovers but no evidence of positive horizontal spillovers. By taking distance into consideration, however, we find positive horizontal spillovers for domestic firms close to foreign‐owned firms. By constructing spillover measures weighted by distance, we find similar patterns. Our results underline the importance of labour market rigidity and the local nature of knowledge in the case of horizontal spillovers.

Journal

Economics of Transition and Institutional ChangeWiley

Published: Oct 1, 2007

Keywords: ; ; ; ;

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