This thesis tried to identify weather domestic manufacturing gain productivity from being supplie... more This thesis tried to identify weather domestic manufacturing gain productivity from being supplier of multinational firms in Ethiopia. Accordingly, the thesis covers extensive econometric analysis, based on Central Statistics agency of Ethiopia annual survey report consisting of 1,958 large and medium manufacturing firms that disaggregated at 36 sectors for the year 2007/8-2011/12, measured domestic firms productivity given Backward-linkage, absorptive capacity and firms size. The thesis employed pooled OLS model, Fixed-Effect model and Levinsohn-Petrin productivity model. The econometric evidence showed positive and significant association between productivity of domestic firms and Multinational firm Backward-linkage. This in part justifies policy actions that promote FDI linkage. Further, the finding highlights the absorptive capacity and size of domestic firms to determine strength of productivity gain through backward linkage. Therefore, the study recommends the importance of FDI policy that simultaneously considers strengthening capacity of input supplying domestic firms in terms of their knowhow and technology.
This thesis tried to identify weather domestic manufacturing gain productivity from being supplie... more This thesis tried to identify weather domestic manufacturing gain productivity from being supplier of multinational firms in Ethiopia. Accordingly, the thesis covers extensive econometric analysis, based on Central Statistics agency of Ethiopia annual survey report consisting of 1,958 large and medium manufacturing firms that disaggregated at 36 sectors for the year 2007/8-2011/12, measured domestic firms productivity given Backward-linkage, absorptive capacity and firms size. The thesis employed pooled OLS model, Fixed-Effect model and Levinsohn-Petrin productivity model. The econometric evidence showed positive and significant association between productivity of domestic firms and Multinational firm Backward-linkage. This in part justifies policy actions that promote FDI linkage. Further, the finding highlights the absorptive capacity and size of domestic firms to determine strength of productivity gain through backward linkage. Therefore, the study recommends the importance of FDI policy that simultaneously considers strengthening capacity of input supplying domestic firms in terms of their knowhow and technology.
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