Resource title

The Veblen-Gerschenkron Effect of FDI in Mezzogiorno and East Germany

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Resource description

The presence of foreign multinational enterprises (MNEs) can benefit local economies. In particular, if MNEs are very productive compared to domestic firms, they may promote learning and catch-up of local firms. Such a channel of spillovers fromMNEs to local firms is known as the Veblen-Geschenkron effect. Rather than the overall density of MNEs in a region or sector, it is their initial productivity advantage on the local firm to determine the positive effect on domestic productivity growth. We test this hypothesis using firm level data for German and Italian companies during the 90ies and we find evidence of a significant and robust Veblen-Gerschenkron effect.

Resource author

Dieter M. Urban, Giovanni Peri

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Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/23201

Resource license

Adapt according to the presented license agreement and reference the original author.