In a recent model Markusen and Venables (1999) describe the conditions under which foreign direct investments (FDI) can act as a catalyst for local industrial development. We apply this framework to the case of Poland, allowing for the entry of multinationals in both intermediates and consumption goods industry. We check these hypotheses against empirical evidence, exploring agglomeration patterns of multinational and domestic firms at the regional level, and constructing an econometric model able to measure the interactions between the two classes of firms. Consistently with the theoretical predictions, we find robust evidence for the idea that multinationals may promote local industrial development through the generation of backward and forward linkages.
Multinational corporations as a catalyst for industrial development: the case of Poland
ALTOMONTE, CARLO;RESMINI, LAURA SANTA
2002
Abstract
In a recent model Markusen and Venables (1999) describe the conditions under which foreign direct investments (FDI) can act as a catalyst for local industrial development. We apply this framework to the case of Poland, allowing for the entry of multinationals in both intermediates and consumption goods industry. We check these hypotheses against empirical evidence, exploring agglomeration patterns of multinational and domestic firms at the regional level, and constructing an econometric model able to measure the interactions between the two classes of firms. Consistently with the theoretical predictions, we find robust evidence for the idea that multinationals may promote local industrial development through the generation of backward and forward linkages.
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