Does competition enhance productivity growth of a developing economy? Is global competition conducive to economic development? Especially, does competition with more advanced producers in the global market promote productivity growth of domestic producers in a developing country? If the answer...

This paper employs nonparametric tests and Japanese firm level data to examine the hypothesis put forward by Helpman, Melitz and Yeaple (2003) and Head and Ries (2003) that firms engaging in FDI are more productive than other firms. We find that the productivity distribution of foreign firms...