Abstract
Original language | English |
---|---|
Pages (from-to) | 61-80 |
Number of pages | 20 |
Journal | Journal of Economic Dynamics and Control |
Volume | 61 |
DOIs | |
Publication status | Published - Dec 2015 |
Keywords
- Multinational production
- Heterogeneous firms
- Technology transfer
- Entry
- Growth
Cite this
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Multinational firms׳ entry and productivity: Some aggregate implications of firm-level heterogeneity. / Contessi, Silvio.
In: Journal of Economic Dynamics and Control, Vol. 61, 12.2015, p. 61-80.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - Multinational firms׳ entry and productivity: Some aggregate implications of firm-level heterogeneity
AU - Contessi, Silvio
PY - 2015/12
Y1 - 2015/12
N2 - Despite the microeconomic evidence supporting the superior idiosyncratic productivity of multinational firms (MNFs) and their affiliates, cross-country studies fail to find robust evidence of a positive relationship between foreign direct investment and growth. In order to study the aggregate implications of MNFs entry and production, I develop a dynamic general equilibrium model with firm heterogeneity where MNFs sort according to their own productivity. The entry and production of MNFs contribute to aggregate productivity growth at decreasing rates and affect domestic producers through general equilibrium effects in the labor market. I argue that the heterogeneous composition of the population of affiliates can help explain the conflicting evidence on the impact of foreign direct investment on growth.
AB - Despite the microeconomic evidence supporting the superior idiosyncratic productivity of multinational firms (MNFs) and their affiliates, cross-country studies fail to find robust evidence of a positive relationship between foreign direct investment and growth. In order to study the aggregate implications of MNFs entry and production, I develop a dynamic general equilibrium model with firm heterogeneity where MNFs sort according to their own productivity. The entry and production of MNFs contribute to aggregate productivity growth at decreasing rates and affect domestic producers through general equilibrium effects in the labor market. I argue that the heterogeneous composition of the population of affiliates can help explain the conflicting evidence on the impact of foreign direct investment on growth.
KW - Multinational production
KW - Heterogeneous firms
KW - Technology transfer
KW - Entry
KW - Growth
U2 - 10.1016/j.jedc.2015.09.002
DO - 10.1016/j.jedc.2015.09.002
M3 - Article
VL - 61
SP - 61
EP - 80
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
SN - 0165-1889
ER -