FEEM working papers "Note di lavoro" series
2011 .006

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


Authors: Sergio Mariotti, Marco Mutinelli, Marcella Nicolini, Lucia Piscitello
Series: Economy and Society
Editor: Fausto Panunzi
Type: Journal
Keywords: Multinational Firms, Co-Location, Proximity, Spillover Effects, Customer-Supplier Interaction, Vertical Linkages
JEL n.: D24, F23, O19, R30
JEL: Regional Studies
Pages: Volume 49, Issue 10, Pages 1639-1653
Date: 12/2014

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.

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Suggested citation: Sergio Mariotti, Marco Mutinelli, Marcella Nicolini, Lucia Piscitello, Productivity Spillovers from Foreign Multinational Enterprises to Domestic Manufacturing Firms: To What Extent Does Spatial Proximity Matter?, Regional Studies, 12/2014; 49(10):1-15. DOI: 10.1080/00343404.2013.867428

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