|
|
Productivity Spillovers and the Entry of Foreign-Owned Firms:
The Case of Japanese Manufacturing Firms
|
| Yukako Murakami and Kyoji Fukao
|
|
This paper shows that in the short run an increase in foreign firms' industry share lowers the TFP growth of Japanese firms as a result of the decrease in market power. However, in the long run, the entry of foreign-owned firms has a positive effect on the productivity of local firms as a result of technology spillovers. In addition, the results suggest that foreign firms exert competitive pressure that forces Japanese firms with a high level of technological capabilities raise their productivity growth.
|
|
| Copyright (C) 2003 by Institute of Economic
Research.All rights reserved. |
|
