Scandinavian Working Papers in Economics

Working Papers,
Örebro University, School of Business

No 2004:2: Foreign Direct Investment and Productivity spillovers in Swedish Manufacturing

Patrik Karpaty () and Lars Lundberg
Additional contact information
Patrik Karpaty: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Department of Business, Economics, Statistics and Informatics, SE - 701 82 ÖREBRO, Sweden
Lars Lundberg: FIEF, Postal: Wallingatan 38, SE-111 24 Stockholm, Sweden,

Abstract: Based on a panel of data for Swedish manufacturing firms in 1990-2000, this paper

finds strong evidence for the existence of positive spillover effects from inward FDI.

The presence of foreign ownership in the same industry and region seems to enhance the total factor productivity of domestic firms. Moreover, the size of these FDI spillover effects seems to depend both on the nationality of the foreign MNF as well as on the absorptive capacity of the domestic firm, measured by its own R&D. It appears that this positive relationship between foreign presence and productivity cannot be explained as a consequence of reverse causality, i.e that FDI is attracted to highly productive regions and industries

Keywords: Multinational firms; Productivity Spillovers; Foreign Direct Investment

JEL-codes: F23; O30

53 pages, September 29, 2004

Price: 120

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