0523712 20240103223942.920200408235959.9 Kyoto Kyoto University, Kyoto Institute of Economic Research 2020 E KIER Discussion Papers 1028 multinational enterprise (MNE) foreign direct investment (FDI) European firms spillovers international trade cav_un_auth*0228062 Hanousek Jan NHU-C Centrum pro ekonomický výzkum a doktorská studia cav_un_auth*0312139 Kočenda Evžen UTIA-B Ekonometrie Department of Econometrics E E Department of Econometrics CZ Ústav teorie informace a automatizace AV ČR, v. v. i. cav_un_auth*0349733 Vozárová P. CZ http://library.utia.cas.cz/separaty/2020/E/kocenda-0523712.pdf We analyze the impact of multinational enterprises (MNEs), via their foreign direct investment, on domestic firms in 30 European host economies, from 2001 to 2013. We incorporate international industrial and trade linkages into a standard theoretical framework and test them empirically on a unique dataset compiled from the Amadeus, Eurostat, UNComtrade and BACI data sources and aggregated at industry level. While controlling for horizontal, vertical, and export channels at the upstream and downstream levels, we show that the presence of MNEs significantly affects domestic firms by changing the degree of competition and improving productivity. The impact is not always positive, as domestic firms are often crowded-out, but the negative effect for an average firm is mostly small. AH 50000 50200 50202 2021 3 RVO:67985556 http://hdl.handle.net/11104/0308070 S 2020 2020 Kyoto Kyoto University, Kyoto Institute of Economic Research