A note on labour productivity and foreign inward direct investment
Foreign direct investment (FDI) is not only a transfer of capital, but a complex bundle of capital and firm-specific assets. In particular, the transfer of production know-how improves overall productivity of FDI-receiving firms and to some extent also that of the other firms due to spillovers. The present note uses a small panel of Austrian manufacturing sectors and investigates this hypothesis empirically. In a flexible CES-framework, general and labour-augmenting productivity improving effects of inward FDI are found. Thus, the job creation potential of FDI highlighted in previous studies is likely to be overestimated.
Year of publication: |
2001
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Authors: | Egger, Peter ; Pfaffermayr, Michael |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 8.2001, 4, p. 229-232
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Publisher: |
Taylor & Francis Journals |
Saved in:
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