The effect on productivity of foreign direct investment: The Spanish Experience

Abstract

The aim of this work is to analyze whether the presence of foreign companies in Spain increases productivity and added value of the host industries. To do that, we estimate an econometric panel data model across sectors for the period 2008 – 2011. For a robustness purpose, we have estimated the model by both the traditional OLS and the fixed effects methods. Our results confirm the positive impact on productivity and added value that the presence of foreign multinationals has in Spain in the services sector. However, according to our estimates, the beneficial influence of FDI in productivity is not clear for the manufacturing sectors.