Vertically Integrated Multinationals and Productivity Spillovers

Federico Clementi, Friedrich Bergmann

Publikation: Bidrag til konferencePaperForskning

Resumé

How does the activity of foreign multinationals affect the competitiveness of local companies in the host countries? Previous studies have identified the interactions of domestic firms with foreign clients as main mechanism of diffusion of knowledge. However, backward productivity spillovers are not automatic. In this paper, we study how these externalities are affected by the strategy of vertical integration of foreign multinationals. Our analysis, based on firm-level data of European manufacturing companies, shows that local firms perceive weaker backward spillovers if client foreign affiliates are vertically integrated in their industry. The spillovers that arise from the activity of companies that do not invest in the domestic firms’ industry are 2.6 to 5 times stronger than the ones than come from affiliates of multinationals that invest in the industry of local firms.
How does the activity of foreign multinationals affect the competitiveness of local companies in the host countries? Previous studies have identified the interactions of domestic firms with foreign clients as main mechanism of diffusion of knowledge. However, backward productivity spillovers are not automatic. In this paper, we study how these externalities are affected by the strategy of vertical integration of foreign multinationals. Our analysis, based on firm-level data of European manufacturing companies, shows that local firms perceive weaker backward spillovers if client foreign affiliates are vertically integrated in their industry. The spillovers that arise from the activity of companies that do not invest in the domestic firms’ industry are 2.6 to 5 times stronger than the ones than come from affiliates of multinationals that invest in the industry of local firms.

Konference

KonferenceVienna Investment Conference
LokationVienna International Centre
LandØstrig
ByVienna
Periode14/09/201615/09/2016
Internetadresse

Citer dette

Clementi, F., & Bergmann, F. (2016). Vertically Integrated Multinationals and Productivity Spillovers. Afhandling præsenteret på Vienna Investment Conference, Vienna, Østrig.
Clementi, Federico ; Bergmann, Friedrich. / Vertically Integrated Multinationals and Productivity Spillovers. Afhandling præsenteret på Vienna Investment Conference, Vienna, Østrig.32 s.
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Clementi, F & Bergmann, F 2016, 'Vertically Integrated Multinationals and Productivity Spillovers' Paper fremlagt ved Vienna Investment Conference, Vienna, Østrig, 14/09/2016 - 15/09/2016, .

Vertically Integrated Multinationals and Productivity Spillovers. / Clementi, Federico; Bergmann, Friedrich.

2016. Afhandling præsenteret på Vienna Investment Conference, Vienna, Østrig.

Publikation: Bidrag til konferencePaperForskning

TY - CONF

T1 - Vertically Integrated Multinationals and Productivity Spillovers

AU - Clementi,Federico

AU - Bergmann,Friedrich

PY - 2016

Y1 - 2016

N2 - How does the activity of foreign multinationals affect the competitiveness of local companies in the host countries? Previous studies have identified the interactions of domestic firms with foreign clients as main mechanism of diffusion of knowledge. However, backward productivity spillovers are not automatic. In this paper, we study how these externalities are affected by the strategy of vertical integration of foreign multinationals. Our analysis, based on firm-level data of European manufacturing companies, shows that local firms perceive weaker backward spillovers if client foreign affiliates are vertically integrated in their industry. The spillovers that arise from the activity of companies that do not invest in the domestic firms’ industry are 2.6 to 5 times stronger than the ones than come from affiliates of multinationals that invest in the industry of local firms.

AB - How does the activity of foreign multinationals affect the competitiveness of local companies in the host countries? Previous studies have identified the interactions of domestic firms with foreign clients as main mechanism of diffusion of knowledge. However, backward productivity spillovers are not automatic. In this paper, we study how these externalities are affected by the strategy of vertical integration of foreign multinationals. Our analysis, based on firm-level data of European manufacturing companies, shows that local firms perceive weaker backward spillovers if client foreign affiliates are vertically integrated in their industry. The spillovers that arise from the activity of companies that do not invest in the domestic firms’ industry are 2.6 to 5 times stronger than the ones than come from affiliates of multinationals that invest in the industry of local firms.

M3 - Paper

ER -

Clementi F, Bergmann F. Vertically Integrated Multinationals and Productivity Spillovers. 2016. Afhandling præsenteret på Vienna Investment Conference, Vienna, Østrig.