Title: Catching-up to foreign technology?
Description: "The presence of foreign multinational enterprises may benefit local economies.  In particular, highly productive foreign-owned firms may promote technological catch-up of local firms.  Such channel of spillovers is defined as "Veblen-Geschenkron" effect of Foreign Direct Investments and is analyzed in this article.  Rather than the overall density of foreign-owned plants in a region or sector, it is their productivity advantage that determines the positive effect on domestic firms in geographical and technological proximity.  We test this hypothesis using new firm-level data for German and Italian manufacturing firms during the 90's.  We find evidence of a significant Veblen-Gerschenkron effect which is robust to different ways of measuring total factor productivity (TFP) of firms and to different empirical specifications"--National Bureau of Economic Research web site.
Subjects: Economic aspects of Foreign investments, Foreign Investments, Manufacturing industries, Technological innovations
Places: Germany, Germany (West), Italy