Abstract:
Previous literature on productivity spillovers has primarily focused on the existence of traditional productivity spillovers. In this study, literature is advanced by analysing not only traditional productivity spillovers but also reverse productivity spillovers. I refer to the combination of traditional and reverse spillovers as mutual productivity spillovers. The aim of this thesis is to enhance the knowledge on mutual productivity spillovers in transitions economies and Slovakia is used as an example. This thesis advances literature in multiple ways. First, it provides insights in mutual productivity spillovers in Slovakia. Second, the study uses a mixed-methods approach. Third, this thesis adds to the stream of studies on reverse spillovers in transitioning economies. Fourth, it allows for the possibility of non-linear spillover effects. I argue that there are positive mutual productivity spillovers present in Slovakia. Further, I argue that the extent of the mutual productivity spillovers depends on the absorptive capacity and technology gap. This thesis uses a mixed-method approach to analyse the existence of mutual productivity spillovers in Slovakia. The main finding of this thesis is the disparity in results of the qualitative and quantitative components. Three interviews were performed in Slovakia, each indicating that positive mutual productivity spillovers indeed exist in Slovakia. For the quantitative component of this thesis, panel data on Slovakian manufacturing and services firms for the period 2003-2012 was used. The results do not support the proposition for the existence of positive mutual productivity spillovers. I find that there are both negative traditional and reverse productivity spillover effects present in Slovakia. Furthermore, I find that the moderating effect of the absorptive capacity on mutual productivity spillovers is mostly insignificant. The moderating effect of the technology gap on mutual productivity spillovers is generally positive. However, there is no evidence that this effect is strongest at intermediate levels.