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Foreign direct investment, competition and industrial development in the host country

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dc.creator Barrios Cobos, Salvador
dc.creator Görg, Holger
dc.creator Strobl, Eric
dc.date 2004
dc.date.accessioned 2013-10-16T06:17:40Z
dc.date.available 2013-10-16T06:17:40Z
dc.date.issued 2013-10-16
dc.identifier Discussion papers Deutsches Institut für Wirtschaftsforschung, Berlin 426
dc.identifier http://hdl.handle.net/10419/3253
dc.identifier ppn:390618861
dc.identifier ppn:390618861
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/3253
dc.description This paper analyses the impact of foreign direct investment (FDI) on the development of local firms. We focus on two likely effects of FDI: a competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry. Using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u-shaped curve, where the competition effect first dominates but is gradually outweighed by positive externalities. Evidence for Ireland tends to support this result. Specifically, applying semi-parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred domestic firms? entry, this initial effect has been outpaced by positive externalities making the overall impact of FDI largely positive in this country.
dc.language eng
dc.publisher Deutsches Institut für Wirtschaftsforschung (DIW) Berlin
dc.relation DIW-Diskussionspapiere 426
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject F2
dc.subject L6
dc.subject O1
dc.subject ddc:330
dc.subject Foreign direct investment , spillovers , industrial development , firm entry , semiparametric estimations
dc.subject Direktinvestition
dc.subject Unternehmensentwicklung
dc.subject Internationaler Wettbewerb
dc.subject Spillover-Effekt
dc.subject Markteintritt
dc.subject Irland
dc.title Foreign direct investment, competition and industrial development in the host country
dc.type doc-type:workingPaper


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