Serbia’s New Growth Agenda : FDI Spillovers

This note examines the relationship between the presence of foreign firms and total factor productivity (TFP) growth of domestic firms (called ‘FDI, Foreign Direct Investment, spillovers’) in Serbia over the period of 2005-16. The analysis finds ev...

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Main Authors:	Brussevich, Mariya, Tan, Shawn W.
Format:	Report
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	ECONOMIC GROWTH FOREIGN DIRECT INVESTMENT TOTAL FACTOR PRODUCTIVITY HERFINDAHL-HIRSCHMAN INDEX TECHNOLOGY TRANSFER
Online Access:	http://documents.worldbank.org/curated/en/226601585547175712/Serbia-s-New-Growth-Agenda-Country-Economic-Memorandum http://hdl.handle.net/10986/33562

id	okr-10986-33562
recordtype	oai_dc
spelling	okr-10986-335622021-05-25T09:34:57Z Serbia’s New Growth Agenda : FDI Spillovers Brussevich, Mariya Tan, Shawn W. ECONOMIC GROWTH FOREIGN DIRECT INVESTMENT TOTAL FACTOR PRODUCTIVITY HERFINDAHL-HIRSCHMAN INDEX TECHNOLOGY TRANSFER This note examines the relationship between the presence of foreign firms and total factor productivity (TFP) growth of domestic firms (called ‘FDI, Foreign Direct Investment, spillovers’) in Serbia over the period of 2005-16. The analysis finds evidence of FDI spillovers in Serbia. Domestic firms on average enjoy higher productivity because of the presence of FDI firms in the economy. Moreover, domestic firms that supply to FDI firms or are located in the same industry as FDI firms, enjoy higher productivity. This presumably stems from technology transfer, higher quality standards, or higher competition. However, productivity of domestic firms sourcing from industries with a large share of FDI firms find their productivity reduced, likely due to markups by foreign firms. The effect of FDI on productivity of domestic firms also varies by firm size and industry. Small firms benefit more from spillovers associated with backward linkages (when they supply to an FDI firm) but are worse off with more horizontal FDI (when they compete with FDI firms in the same industry). Firms in high-tech industries benefit more from horizontal and backward FDI spillovers, but firms in low-tech industries experience no effect. Lastly, firms in the transport manufacturing industry do not enjoy any FDI spillover from foreign firms in their industry. 2020-04-09T20:17:17Z 2020-04-09T20:17:17Z 2019-11-28 Report http://documents.worldbank.org/curated/en/226601585547175712/Serbia-s-New-Growth-Agenda-Country-Economic-Memorandum http://hdl.handle.net/10986/33562 English Country Economic Memorandum; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Country Economic Memorandum Europe and Central Asia Serbia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ECONOMIC GROWTH FOREIGN DIRECT INVESTMENT TOTAL FACTOR PRODUCTIVITY HERFINDAHL-HIRSCHMAN INDEX TECHNOLOGY TRANSFER
spellingShingle	ECONOMIC GROWTH FOREIGN DIRECT INVESTMENT TOTAL FACTOR PRODUCTIVITY HERFINDAHL-HIRSCHMAN INDEX TECHNOLOGY TRANSFER Brussevich, Mariya Tan, Shawn W. Serbia’s New Growth Agenda : FDI Spillovers
geographic_facet	Europe and Central Asia Serbia
relation	Country Economic Memorandum;
description	This note examines the relationship between the presence of foreign firms and total factor productivity (TFP) growth of domestic firms (called ‘FDI, Foreign Direct Investment, spillovers’) in Serbia over the period of 2005-16. The analysis finds evidence of FDI spillovers in Serbia. Domestic firms on average enjoy higher productivity because of the presence of FDI firms in the economy. Moreover, domestic firms that supply to FDI firms or are located in the same industry as FDI firms, enjoy higher productivity. This presumably stems from technology transfer, higher quality standards, or higher competition. However, productivity of domestic firms sourcing from industries with a large share of FDI firms find their productivity reduced, likely due to markups by foreign firms. The effect of FDI on productivity of domestic firms also varies by firm size and industry. Small firms benefit more from spillovers associated with backward linkages (when they supply to an FDI firm) but are worse off with more horizontal FDI (when they compete with FDI firms in the same industry). Firms in high-tech industries benefit more from horizontal and backward FDI spillovers, but firms in low-tech industries experience no effect. Lastly, firms in the transport manufacturing industry do not enjoy any FDI spillover from foreign firms in their industry.
format	Report
author	Brussevich, Mariya Tan, Shawn W.
author_facet	Brussevich, Mariya Tan, Shawn W.
author_sort	Brussevich, Mariya
title	Serbia’s New Growth Agenda : FDI Spillovers
title_short	Serbia’s New Growth Agenda : FDI Spillovers
title_full	Serbia’s New Growth Agenda : FDI Spillovers
title_fullStr	Serbia’s New Growth Agenda : FDI Spillovers
title_full_unstemmed	Serbia’s New Growth Agenda : FDI Spillovers
title_sort	serbia’s new growth agenda : fdi spillovers
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/226601585547175712/Serbia-s-New-Growth-Agenda-Country-Economic-Memorandum http://hdl.handle.net/10986/33562
_version_	1764479031268343808

Serbia’s New Growth Agenda : FDI Spillovers

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