Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 2: Productivity Spillovers from FDI in the Uruguayan Manufacturing Sector

Ari Kokko (), Ruben Tansini and Mario Zejan
Additional contact information
Ari Kokko: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Mario Zejan: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden

Abstract: This paper examines intra-industry spillovers from FDI in Uruguayan manufacturing plants in 1988, to determine whether differences in the technology gap between locally- owned plants and foreign affiliates have any impact on the relation between local productivity and foreign presence. We find a positive and statistically significant spillover effect only in a sub-sample of locally-owned plants with moderate technology gaps vis-a-vis foreign firms. Our interpretation is that there are firm-specific differences in the ability to absorb spillovers, and that these may explain some of the contradictory findings of earlier spillover studies.

Keywords: Foreign direct investment; multinational corporations; productivity; spillovers

JEL-codes: F23; O49

12 pages, January 1994

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