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Brown Bag Lunch
Monday
29
November
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Foreign Linkages and Firm Performance: Evidence from Enterprise Surveys

Anmol Grewal, PhD Researcher in International Economics
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Seminar streamed via WebEx

The Brown Bag Lunch is a weekly event organized by the Department of International Economics.

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As part of the Brown Bag Lunch series, the International Economics Department at the Graduate Institute is pleased to invite you to a public talk given by Anmol Grewal, PhD Researcher in International Economics.

 

Foreign Linkages and Firm Performance: Evidence from Enterprise Surveys

by Anmol Grewal

Abstract: This paper studies the firm-level dynamics of foreign linkages, innovation and productivity in the context of developing countries. Using harmonized survey data from the World Bank Enterprise Surveys, I construct a panel dataset for over 40 developing countries spanning 2006-2019. Using this panel data, I estimate a structural model of how foreign linkages affect firm performance. I distinguish between four types of foreign linkages: exports, imports, inward FDI and the use of foreign-licensed technology, and two types of innovation: product and process. I use a Heckman selection model followed by a control function approach to address the endogeneity between foreign linkages and firm performance. The findings of this paper indicate that, relative to firms that served only the domestic market, firms in developing countries with foreign linkages were more likely to invest in innovation and generate greater innovation output. Further investigation is needed to establish how innovation output translates into firm productivity.