GEP Research Paper 02/11
Do Domestic Firms Learn to Export from Multinationals?
D. Greenaway, N. Sousa and K. Wakelin
This paper is forthcoming in the European Journal of Political Economy, Vol.20, 2004.
Abstract
Is it possible for a domestic firm to become more export oriented in response to the activities of MNEs' subsidiaries in the host country? We identify three channels through which this may occur, namely export information externalities, increased competition in the domestic market and demonstration effects. We then investigate this empirically for the United Kingdom, using a large firm-level panel of 3,662 firms from 1992 to 1996. Our results confirm positive spillover effects from MNEs on the decision to export of UK-owned firms as well as on their export propensity. It is also clear from our results that the main channel for this phenomenon is increased competition.
Issued in September 2002.
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