Liquidity Constraints and Firms' Linkages with Multinationals
Using a unique data set on the Czech Republic for 1994--2003, this article examines the relationship between a firm's liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying multinationals are less credit constrained than are nonsuppliers. Closer inspection of the timing of the effect, however, suggests that the result is due to self-selection of less constrained firms into supplying multinationals rather than to the benefits derived from the supplying relationship. As the recent literature finds that productivity spillovers from foreign direct investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, this finding suggests that well-developed financial markets may be needed to take full advantage of the benefits associated with FDI inflows. Copyright The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / <sc>the world bank</sc>. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
Year of publication: |
2009
|
---|---|
Authors: | Javorcik, Beata S. ; Spatareanu, Mariana |
Published in: |
World Bank Economic Review. - World Bank Group. - Vol. 23.2009, 2, p. 323-346
|
Publisher: |
World Bank Group |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Migrant Networks And Foreign Direct Investment
Javorcik, Beata S., (2006)
-
Liquidity constraints and linkages with multinationals
Spatareanu, Mariana, (2008)
-
Tough Love: Do Czech Suppliers Learn from Their Relationships with Multinationals?
Javorcik, Beata S., (2009)
- More ...