Recent literature on multinational firms has focused on low productivity as a barrier to the internationalization of firms. But labour market frictions or financial constraints may also hamper internationalization. In order to assess the importance of these barriers, we present new empirical evidence on the extensive and intensive margin of exports and foreign direct investment (FDI) based on micro-level data of German firms. First, we find a positive impact of firm size and productivity on firms’ international activities. Second, labour market frictions can constitute barriers to foreign activities. Third, self-reported financial constraints have no impact on firms’ internationalization decisions.

This paper analyzes the spatial distribution of foreign direct investment (FDI) across regions in Russia. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and links regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that market-related factors and the availability of natural resources are important factors in attracting FDI. Second, existing agglomeration economies encourage foreign investors. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions.

Innovation systems abroad become more and more important to multinational enterprises (MNEs) as sources of knowledge and technology. On the other hand, MNEs’ foreign subsidiaries can be considered agents of technological and economic development in their target location region. Applying a logit estimation, this discussion paper investigates which firm- and region-specific determinants influence cooperations in the area of research and development (R&D) between the foreign subsidiary and the regional innovation system. Results suggest that especially the foreign subsidiary’s mandate in terms of R&D and management, its size and the regional knowledge stock are positively associated with these co-operations. The analysis focuses on posttransition economies, using the example of five selected CEE countries and East Germany. We exploit a unique dataset – the IWH FDI Micro Database – which holds information on 1,245 foreign subsidiaries in this region.

This paper conducts an empirical study of the factors that affect the spatial distribution of foreign direct investment (FDI) across regions in Russia; in particular, this paper is concerned with those regions that are endowed with natural resources and market-related benefits. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and linked regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that one theory alone is not able to explain the geographical pattern of foreign investments in Russia. A combination of determinants is at work; market-related factors and the availability of natural resources are important factors in attracting FDI. The relative importance of natural resources seems to grow over time, despite shocks associated with events such as the Yukos trial. Second, existing agglomeration economies encourage foreign investors by means of forces generated simultaneously by sector-specific and inter-sectoral externalities. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions. The results are robust when Moscow is excluded and for subsamples including only Greenfield investments or both Greenfield investments and mergers and acquisitions (M&A).

With the integration of post-communist countries into the European and global economy

after 1990, there was strong research interest into the role of multinational enterprises

(MNEs) for economic restructuring and technological catching-up. Most of the existing

empirical studies on locational determinants of FDI and host country effects did not take

account of East Germany. This might be for different reasons: Firstly, theoretical and

empirical difficulties derive from the fact that East Germany followed a distinct transition

pattern as it became a region subsumed in a larger and more mature economy. Secondly,

East Germany received private investment from foreign as well as West German firms. Only

the first can be considered as a foreign direct investment (FDI). Finally, there had long been

a lack of micro data to adequately analyse the activities of corresponding firms from a

production as well as technological perspective.

This paper analyzes the performance of global value chains during the trade collapse. To do so, it exploits a unique transaction-level dataset on French firms containing information on cross-border monthly transactions matched with data on worldwide intrafirm linkages as defined by property rights (multinational business groups, hierarchies of firms). This newly assembled dataset allows us to distinguish firm-level transactions among two alternative organizational modes of global value chains: internalization of activities (intragroup trade/trade among related parties) or establishment of supply contracts (arm's length trade/trade among unrelated parties). After an overall assessment of the role of global value chains during the trade collapse, we document that intra-group trade in intermediates was characterized by a faster drop followed by a faster recovery than arm's length trade. Amplified fluctuations in terms of trade elasticities by value chains have been referred to as the "bullwhip effect" and have been attributed to the adjustment of inventories within supply chains. In this paper we first confirm the existence of such an effect due to trade in intermediates, and we underline the role that different organizational modes can play in driving this adjustment.

The integration of post-communist countries into the European and global economy after 1990 has led to a renewed interest in the role of multinational enterprises (MNEs) in economic restructuring and technological development. This book explains the expansion of MNEs into a transition economy from the technology accumulation perspective. Key assumptions of the technological accumulation approach towards firms' internationalisation are tested, using the examples of foreign and West German MNEs in East Germany. The effects of technological externalities on MNE location choice are analysed, in addition to an exploration of the factors driving the location of foreign affiliates' research and development (R&D) and innovation activities. The book provides a novel and comprehensive empirical approach to assess the developmental role of MNEs, deriving significant economic policy implications for transition and emerging economies.

Innovationen in Form neuer Produkte und Produktionsprozesse sind in fortgeschrittenen Volkswirtschaften der entscheidende Treiber der wirtschaftlichen Entwicklung. Nach Abschluss der massiven technologischen Erneuerung

in Ostdeutschland, die sich bis Ende der 1990er Jahre in deutlich höheren Quoten innovierender Betriebe als in Westdeutschland niederschlug, müssen sich die Betriebe in den Neuen Ländern im Innovationswettbewerb behaupten.

Der Beitrag skizziert die Innovationstätigkeit der Betriebe in Ost- und Westdeutschland und geht im Rahmen einer multivariaten Analyse den Bestimmungsfaktoren von Produkt- und Prozessinnovationen nach.

Die empirischen Untersuchungen unter Verwendung des IAB-Betriebspanels zeigen, dass sich die Betriebe des Verarbeitenden Gewerbes in Ostdeutschland im Jahr 2008 durch eine rege Innovationsbeteiligung auszeichnen. Gemessen am Anteil der Betriebe mit Innovationen bestehen zwischen Ost- und Westdeutschland keine wesentlichen Unterschiede. Die regressionsanalytische Untersuchung zeigt, dass eigene betriebliche Forschung und Entwicklung (FuE) eine wichtige Einflussgröße für Innovationen in Ost- und Westdeutschland darstellt. Auch den betrieblichen Weiterbildungsaktivitäten kann ein positiver Einfluss bescheinigt werden. Ein wesentlicher Unterschied zwischen Ost- und Westdeutschland besteht darin, dass eine zunehmende Betriebsgröße in Ostdeutschland – anders als in Westdeutschland – keinen Einfluss auf die Innovationsneigung ausübt. In Ostdeutschland zeigen die kleinen Betriebe (10 bis 49 Beschäftigte) eine starke Innovationsneigung bei den besonders wichtigen Produktinnovationen im Sinne

von Marktneuheiten.

The paper is a methodological report on the IWH-FDI-Micro Database of the year 2009. It contains a motivation of the research questions and describes the availability of existing data sources on multinational affiliates in transition economies. In its core it describes the population, survey sampling and implementation, in depth information on the survey representativeness, and questionnaire design. The 2009 survey covers multinationals affiliates in manufacturing and selected services of Hungary, Czech Republic, Poland, Romania, Slovakia, and East Germany.

The paper is a methodological report on the IWH-FDI-Micro Database of the year 2010. It contains a motivation of the research questions and describes the availability of existing data sources on multinational affiliates in transition economies. In its core it describes the population, survey sampling and implementation, in depth information on the survey representativeness, and questionnaire design. The 2010 survey covers multinationals affiliates in manufacturing and selected services of East Germany.