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Horizontal crowding-out versus vertical synergies under the MNE presence
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SYSNO ASEP 0479446 Document Type C - Proceedings Paper (int. conf.) R&D Document Type Conference Paper Title Horizontal crowding-out versus vertical synergies under the MNE presence Author(s) Hanousek, Jan (NHU-C) RID
Kočenda, E. (CZ)
Vozárová, P. (CZ)Source Title Proceedings of the 7th Economics & Finance Conference. - Prague : International Institute of Social and Economic Sciences (IISES), 2017 / Cermakova K. - ISSN 2336-6044 - ISBN 978-80-87927-32-8 Pages s. 71-116 Number of pages 46 s. Publication form Print - P Action Economics & Finance Conference /7./ Event date 08.03.2017 - 10.03.2017 VEvent location Tel Aviv Country IL - Israel Event type WRD Language eng - English Country CZ - Czech Republic Keywords multinational enterprise (MNE) ; foreign direct investment (FDI) ; European firms Subject RIV AH - Economics OECD category Finance R&D Projects GA15-15927S GA ČR - Czech Science Foundation (CSF) Institutional support NHU-C - Progres-Q24 UT WOS 000426854900006 DOI 10.20472/EFC.2017.007.006 Annotation In this paper we provide a comprehensive analysis of the impact of the multinational enterprises (MNEs) and foreign direct investment (FDI) on domestic firms in Europe. We build on the theoretical model of Markusen and Venables (1999) and modify it to better reflect reality and to capture international industrial linkages. For empirical part we build a unique and large database that covers 30 European countries over 2001 - 2013. Rich data are combined from the Amadeus, UN Comtrade and BACI sources. Our results do not show evidence for a pure spillover effect when other channels are controlled for. However, on a more detailed level we show that MNE's presence significantly affects domestic firms both in terms of changing market structure and productivity improvements. On other hand, change in sourcing patterns often results in that domestic firms are crowded-out. However, those domestic firms, that are able to withstand this double competition, receive additional benefits stemming from their interaction with downstream MNEs in form of productivity spillovers. We also document existence of trade (export) spillovers for both upstream and downstream levels. Despite that impact of the MNEs presence is not unambiguous the existence of positive production and trade spillovers is overwhelming. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2018
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