Technology spillovers from external investors in East Germany: no overall effects in favor of domestic firms
Harald Lehmann, Jutta Günther
IWH Discussion Papers,
No. 198,
2004
Abstract
The study deals with the question whether external (foreign and West German) investors in East Germany induce technological spillover effects in favor of domestic firms. It ties in with a number of other econometric spillover studies, especially for transition economies, which show rather mixed and inconclusive results so far. Different from existing spillover analyses, this study allows for a much deeper regional breakdown up to Raumordnungsregionen and uses a branch classification that explicitly considers intermediate and investment good linkages. The regression results show no positive correlation between the presence of external investors and domestic firms’ productivity, no matter which regional breakdown is looked at (East Germany as a whole, federal states, or Raumordnungsregionen). Technology spillovers which may exist in particular cases are obviously not strong enough to increase the domestic firms’ overall productivity.
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Exporting Financial Institutions Management via Foreign Direct Investment Mergers and Acquisitions
Allen N. Berger, Claudia M. Buch, G. DeLong
Journal of International Money and Finance,
No. 3,
2004
Abstract
We test the relevance of the new trade theory and the traditional theory of comparative advantage for explaining the geographic patterns of international M&As of financial institutions between 1985 and 2000. The data provide statistically significant support for both theories. We also find evidence that the U.S. has idiosyncratic comparative advantages at both exporting and importing financial institutions management.
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Technological capability of foreign and West German investors in East Germany
Jutta Günther
IWH Discussion Papers,
No. 189,
2004
Abstract
Foreign direct investment (FDI) plays an important role for countries or regions in the process of economic catching-up since it is assumed – among other things – that FDI brings in new production technology and knowledge. This paper gives an overview about the development of FDI in East Germany based on official data provided by the Federal Bank of Germany. The investigation also includes a comparison of FDI in East Germany to Central East European countries. But the main focus of the paper is an analysis of the technological capability comparing majority foreign and West German owned firms to majority East German owned firms. It shows that foreign and West German subsidiaries in East Germany are indeed characterized by superior technological capability with respect to all indicators looked at (product innovation, research & development, organizational changes etc.).
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Technology spillovers through foreign direct investment. An empirical investigation on the example of Hungarian industry
Jutta Günther
Schriften des IWH,
No. 14,
2003
Abstract
With the beginning of transition in Central East European countries, foreign direct investment increased strongly whereby foreign subsidiaries transfer modern production technology and management know-how. However, it has remained an open question, how far domestic enterprises also benefit from these developments via technology spillovers. The study points out theoretically possible channels of technology spillovers and empirically investigates the significance, scope and influencing factors of the various spillovers channels on the example of Hungarian industry. The findings show that there are hardly any spillover effects in Hungarian industry so far. Major reasons for that are the strong technological disparities between foreign subsidiaries and domestic firms as well as the lack of labor mobility from foreign to domestic enterprises.
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FDI Subsidiaries and Industrial Integration of Central Europe: Conceptual and Empirical Results
Boris Majcen, Slavo Radosevic, Matija Rojec
IWH Discussion Papers,
No. 177,
2003
Abstract
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Intra-industry trade and the productivity gap in the enlarged EU
Hubert Gabrisch
Wirtschaft im Wandel,
No. 16,
2002
Abstract
Trade between the European Union (EU) and the Transition Economies (TE) is increasingly characterised by intra-industry trade. The decomposition of intra-industry trade into horizontal and vertical shares reveals predominantly vertical structures with decisively more quality advantages for the EU and less quality advantages for TE countries whenever trade has been liberalised. Sizeable foreign direct investment did obviously not reduce the superiority of producers in the EU in terms of technology, capital and human capital. The productivity gap between the EU and TE countries remains. EU firms have been able to increase their product quality and to shift low-quality segments of production to TE countries. This may suggest a product-quality cycle prevalent in EU-TE trade. The testing of this model confirms the assumptions.
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Hardly any technology spillovers from supplier contacts of foreign subsidiaries in Hungary
Jutta Günther
Wirtschaft im Wandel,
No. 13,
2002
Abstract
“Almost no technology spillovers via supplier contacts of foreign subsidiaries in Hungary“ Transition economies in the process of catching-up expect that interactions between modern equipped foreign subsidiaries and backward local companies lead to technology spillovers, especially via supplier contacts. The explorative empirical study shows, however, that linkages between foreign subsidiaries and local firms do hardly exist. First, this is due to the fact that the foreign affiliates largely stick to suppliers in their home countries. Second, the technological disparities between foreign subsidiaries and local firms - the so-called dual structure of economy - hinders cooperation in the field of supplier contacts.
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FDI as Multiplier of Modern Technology in Hungarian Industry
Jutta Günther
Intereconomics,
No. 5,
2002
Abstract
Foreign direct investment is generally expected to play a significant role as a multiplier of modern production and management know-how in Central Eastern European transition economies. The following paper examines the various mechanisms by which such technological spillover effects could in theory take place and compares them with the results of an empirical study of their practical significance for Hungarian industry.
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The significance of FDI for innovation activities within domestic firms - The case of Central East European transition economies
Jutta Günther
IWH Discussion Papers,
No. 162,
2002
Abstract
Foreign direct investment is expected to play a significant role as a multiplier of modern production- and management-know-how in Central East European transition economies. The so-called technology-spillovers are explained through externalities or extra-marketlinkages. In practice they can take place via demonstration effects, labor mobility, supplier contacts, customer contacts or networking activities. However, the empirical study on the example of Hungarian industry shows that foreign owned and domestic firms – mainly due to their strong technological disparities – build virtually separate spheres within the industrial sector. Thus, technology-spillovers do hardly appear as an innovation-stimulating means for domestic companies.
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Bank-Firm Relationships and International Banking Markets
Hans Degryse, Steven Ongena
International Journal of the Economics of Business,
No. 3,
2002
Abstract
This paper reviews how long-term relationships between firms and banks shape the structure and integration of banking markets worldwide. Bank relationships arise to span informational asymmetries that are endemic in financial markets. Firm-bank relationships not only entail specific benefits and costs for both the engaged firms and banks, but also directly affect the structure of banking markets. In particular, the sunk cost of screening and monitoring activities and the 'informational capital' collected by the incumbent banks may act as a barrier to entry. The intensity of the existing firm-bank relationships will determine the height of this barrier and shape the structure of international banking markets. For example, in Scandinavia where firms maintain few and strong relationships, foreign banks may only be able to enter successfully through mergers and acquisitions. On the other hand, Southern European firms maintain many bank relationships. Therefore, banks may consider entering Southern European banking markets through direct investment.
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