The Export Spillover Effects of Multi National Companies on Local Firms: A Study Conducted in Ethiopia

Abstract

The presences of MNCs have direct and indirect impacts on the performance of local firms in the host country. This study was conducted with the aim of empirically examining the indirect effects with particular emphasis to export spillover effects. The study employed balanced secondary panel data of Ethiopian Manufacturing firms from 2010-2014 and employed logistic regression method to examine the same. The outcome unveiled that the increasing presence of MNCs decreases the likely hood of local firms’ export decision and export propensity. Therefore, from the study it is concluded that the presences of MNCs negatively affect the export behavior of local firms in Ethiopia.

Keywords: Export spillover, Multinational companies, local firms, Ethiopia