Mutual Productivity Spillovers in Slovakia - a Qualitative Approach
This paper explores two related research questions: (1) how does the presence of foreign firms affect productivity of local firms; and (2) how does the presence of local firms affect productivity of foreign firms. The study is set in a context of Slovakia and is based on two in-depth semi-structured interviews with one foreign and one local firm from a technology intensive industry. In addition to the existence of normal and reverse foreign direct investment (FDI) spillovers, sources and mechanisms of these spillovers are analyzed. We find support for the existence of mutual productivity spillovers in Slovakia. The main sources of normal spillovers are foreign knowledge and technology while the main source of reverse spillovers is knowledge about local business practices. The main transmission mechanisms of normal spillovers are backward linkages, demonstration, competition effects, training and labor mobility. The main transmission mechanisms of reverse spillovers are local employees and forward linkages with customers. The most interesting insight of the study is that some local firms from emerging markets possess technology of world-class level, which can spill over to foreign firms. (fragment of text)
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