The authors thank Matthias Busse, Ana Fernandes, Caroline Freund, Joep Konings, and Reinhilde Veugelers, as well as two anonymous reviewers for helpful suggestions. The authors are grateful for financial support from the World Bank's Research Support Budget for the project “Technology Transfer through Vertical Relationships between Multinationals and Local Suppliers” and from the Research Council, Rutgers University.
Tough Love: Do Czech Suppliers Learn from their Relationships with Multinationals?*
Article first published online: 9 DEC 2009
© The editors of the Scandinavian Journal of Economics 2009
The Scandinavian Journal of Economics
Volume 111, Issue 4, pages 811–833, December 2009
How to Cite
Javorcik, B. S. and Spatareanu, M. (2009), Tough Love: Do Czech Suppliers Learn from their Relationships with Multinationals?. The Scandinavian Journal of Economics, 111: 811–833. doi: 10.1111/j.1467-9442.2009.01591.x
- Issue published online: 9 DEC 2009
- Article first published online: 9 DEC 2009
- FDI spillovers;
- vertical spillovers;
- multinational suppliers;
- Czech Republic
Countries strive to attract foreign direct investment hoping that knowledge brought by multinationals will spill over to domestic producers. While the literature has cast doubt on the existence of spillovers within industries, it has found evidence of spillovers from multinationals to the supplying sectors. However, the existing studies rely on industry-level proxies rather than information on actual relationships between suppliers and multinationals. This study goes one step further by employing a unique dataset from the Czech Republic where such relationships can be identified. It finds evidence consistent with both high productivity firms having a higher probability of supplying multinationals as well as suppliers learning from their relationships with multinationals.