Linking corporate productivity to foreign direct investment: An empirical assessment

This paper examines whether foreign firms generate productivity spillovers. Despite the relevance of this question to public policy, previous studies have failed to find consistent and conclusive evidence to support the existence of positive spillovers. Using previously unexploited firm-level data over the 1994–1999 period, we attempt to contribute to the literature on productivity spillovers from FDI by analysing the Portuguese manufacturing industry. The results indicate that foreign firms in the same industry of the observed firms (horizontal spillovers) and linkages between foreign firms and their local suppliers or customers (vertical spillovers) do not impact significantly on firms’ productivity. Moreover, we detected no differences on productivity spillovers associated to firm-specific characteristics.     

NEEDS FOR CONSISTENCY AND FLEXIBILITY IN MEASURES OF REAL PRODUCT BY INDUSTRY1

Study of relationships between outputs, inputs, prices, and final demands in the United States can be strengthened by: (1) eliminating disparities in official measures of output (mainly the Index of Industrial Production and Real Gross National Product), and (2) obtaining agreement on the conceptual framework for studying these relationships. Real Gross Product has provided a consistent framework for study of productivity and prices for the total economy and for broad industry groups, but has not easily permitted the analysis of commodity detail particularly for intermediate commodities. Industrial Production, on the other hand, has considerably extended the detailed analysis of commodity output but has not provided a basis for systematic analysis of productivity and prices within a consistent framework for the total economy. This paper illustrates the effect of some of the disparities between Industrial Production and Gross Product in manufacturing on the analysis of relations between prices and output and prices and productivity. This is done for the 1954–1958 period when benchmark data are available for both measures. Inconsistencies for a number of industries cause difficulties in analyzing the interplay of demand and cost influences on price changes; for example, industries which rise above average in output and below in price in one measure are not the same as those in similar price-quantity relationships in the other measure. The paper concludes by recommending improvements in data and concept in order to eliminate some of the disparities and to enable analysts to reap the benefits of both types of measures of real output.