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Productivity Spillovers from Foreign MNEs on Domestic Manufacturing Firms: Is Co-location Always a Plus?

Author

Listed:
  • Sergio Mariotti

    (DIG - Politecnico di Milano)

  • Marco Mutinelli

    (University of Brescia)

  • Marcella Nicolini

    (Fondazione Eni Enrico Mattei)

  • Lucia Piscitello

    (DIG - Politecnico di Milano)

Abstract

The paper analyses productivity spillovers from foreign MNEs on domestic manufacturing firms. Using a database on foreign MNEs in Italy, our results reveal that local firms do benefit from the presence of foreign MNEs, and the effect is higher when local and foreign firms in manufacturing sectors are co-located. However, spillovers benefiting domestic firms are likely to be less influenced by co-location when foreign MNEs are in services sectors as the latter are different from manufacturing industries under a number of aspects that overcome the effect of distance. Indeed, in these sectors, proximity and interaction are often obtained through professional mobility and temporary inter-organizational routines.

Suggested Citation

  • Sergio Mariotti & Marco Mutinelli & Marcella Nicolini & Lucia Piscitello, 2011. "Productivity Spillovers from Foreign MNEs on Domestic Manufacturing Firms: Is Co-location Always a Plus?," Working Papers 2011.06, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2011.06
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    Cited by:

    1. Fernando Ubeda & Francisco Pérez-Hernández, 2017. "Absorptive Capacity and Geographical Distance Two Mediating Factors of FDI Spillovers: a Threshold Regression Analysis for Spanish Firms," Journal of Industry, Competition and Trade, Springer, vol. 17(1), pages 1-28, March.
    2. Danai Christopoulou & Nikolaos Papageorgiadis & Chengang Wang & Georgios Magkonis, 2021. "IPR Law Protection and Enforcement and the Effect on Horizontal Productivity Spillovers from Inward FDI to Domestic Firms: A Meta-analysis," Management International Review, Springer, vol. 61(2), pages 235-266, April.
    3. Matija Rojec & Mark Knell, 2018. "Why Is There A Lack Of Evidence On Knowledge Spillovers From Foreign Direct Investment?," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 579-612, July.

    More about this item

    Keywords

    Multinational Firms; Co-Location; Proximity; Spillover Effects; Customer-Supplier Interaction; Vertical Linkages;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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