TY  - JOUR
AU  - Peri,Giovanni
TI  - Catching-Up to Foreign Technology? Evidence on the "Veblen-Gerschenkron" Effect of Foreign Investments
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10893
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10893
L1  - http://www.nber.org/papers/w10893.pdf
N1  - Author contact info:
Giovanni Peri
Department of Economics
University of California, Davis
One Shields Avenue
Davis, CA 95616
Tel: 530/752-3033
E-Mail: gperi@ucdavis.edu
AB  - The presence of foreign multinational enterprises may benefit local economies. In particular, highly productive foreign-owned firms may promote technological catch-up of local firms. Such channel of spillovers is defined as "Veblen-Geschenkron" effect of Foreign Direct Investments and is analyzed in this article. Rather than the overall density of foreign-owned plants in a region or sector, it is their productivity advantage that determines the positive effect on domestic firms in geographical and technological proximity. We test this hypothesis using new firm-level data for German and Italian manufacturing firms during the 90's. We find evidence of a significant Veblen-Gerschenkron effect which is robust to different ways of measuring total factor productivity (TFP) of firms and to different empirical specifications.
ER  -