No

This dissertation comprises two essays in financial economics. They study how firms finance and invest in innovative and intangible assets. The first essay examines the impact of technology spillovers on corporate financing decisions for innovative firms. I find that greater technology spillovers lead to higher leverage in innovative firms. Furthermore, in firms with greater technology spillovers, equity is more costly relative to debt. I find that these financing effects are generated by at least three related mechanisms: information asymmetry, asset redeployability, and equity undervaluation. All three mechanisms lead firms to substitute away from equity and toward debt. The results are robust to exploiting variation in RandD tax credits to identify the causal effect of technology spillovers. The second essay is coauthored with Ambrus Kecskés at York University and Sattar Mansi at Virginia Tech. My coauthors and I enter the long-lived debate about whether stakeholder capital investment increases shareholder value. We argue that long-term investors are natural monitors that can ensure that managers choose stakeholder capital investment to maximize shareholder value. We find that long-term investors increase the value to shareholders of stakeholder capital investment, not as a result of higher cash flow but rather of lower cash flow risk. Also following prior work, we use indexing by investors and the staggered adoption of state laws on stakeholder orientation for identification. Our findings suggest that firms can create value for shareholders by investing in stakeholder capital as long as managers are properly monitored by long-term investors. / Ph. D.

En décembre 2004, les autorités publiques françaises lancent le premier appel à projet donnant le coup d'envoi de la politique des pôles de compétitivité dont la phase 3, lancé par le gouvernement le 6 janvier 2013, met particulièrement l'accent sur les retombées économiques issues des pôles de compétitivité qui devront être amplifiées. L'objectif de cette thèse est de vérifier l'existence de telles retombées (spillovers) issues des investissements directs étrangers (IDE) dans le cas français. Plus précisément nous analysons les conséquences de spillovers sur la productivité des firmes en France et nous cherchons à savoir si les décisions d'investir en Recherche et Développement (R&D) sont étroitement liées au niveau des spillovers circulant entre les firmes locales et les firmes étrangères implantées en France. Dans un premier chapitre, nous vérifions l'existence de spillovers de connaissance à travers deux canaux de transmission : horizontal et vertical. Nous mettons en évidence les spillovers qui se diffusent d'une part entre clients étrangers et fournisseurs locaux dans les secteurs en amont (backward linkages) et d'autre part, entre fournisseurs étrangers et clients locaux dans les secteurs en aval (forward linkages). Nous suggérons que dans le cas de la France, les spillovers de connaissance se manifestent principalement via les backward spillovers, alors que les spillovers au sein d'un même secteur (horizontal spillovers) et les spillovers diffusés par les fournisseurs étrangers vers les clients locaux agissent plutôt comme un frein à la productivité des firmes en France. Dans le second chapitre, nous portons notre attention à l'intérêt des firmes d'investir davantage en R&D en fonction de l'intensité des retombées issus de ces activités. Nous construisons, pour ce faire, un modèle théorique permettant de modéliser les stratégies des firmes en termes de R&D en fonction du savoir-faire diffusé par une filiale étrangère dans le pays d'accueil (international R&D spillovers), du savoir-faire diffusé par une firme locale (reverse R&D spillovers) et de l'échange du savoir-faire entre une filiale et sa maison-mère située dans son pays d'origine (internal technological transfer). Nous montrons que la prise en compte de ces différents canaux de spillovers exogènes dans le modèle renvoie à un cadre du dilemme du prisonnier où la diffusion d'un niveau élevé et comparable du savoir-faire encourage les firmes à investir en R&D et qu'une diffusion faible par rapport à un seuil (établi en fonction de l'intensité de la concurrence) les incite à réduire leurs activités de R&D. Dans un cadre de extit{spillovers} asymétrique, la firme qui absorbe le plus la technologie de sa concurrente a intérêt à investir davantage en R&D. Dans le dernier chapitre, nous nous intéressons aux international spillovers et reverse spillovers issus non seulement des activités de R&D mais aussi des activités d'outsourcing. Nous suggérons que les effets des spillovers internationaux sur la productivité des firmes en France sont plus importants que ceux des reverse spillovers. Lorsqu'il s'agit de spillovers issus des activités de R&D, l'effet est positif et significatif en amont et en aval mais plus important pour les liens en backward. Concernant les spillovers issus des activités d'outsourcing, l'effet est uniquement en faveur des spillovers diffusés par les donneurs d'ordre. Ces effets sont mitigés selon le niveau technologique du secteur concerné. L'effet des spillovers sur la productivité des firmes appartenant à un secteur de niveau technologique élevé semble être plus important que pour celles appartenant à des secteurs de bas et/ou moyen niveau technologique. / In December 2004, the French public authorities launched the first call for projects kicking off the policy clusters, including Phase 3 launched by the government on 9 January 2013, with particular emphasis on issues of economic spinoffs clusters that should be amplified. The objective of this thesis is to verify the existence of such spinoffs (spillovers) from foreign direct investment (FDI) in the French case. Specifically, we analyze the impact of spillovers on the productivity of firms located in France and we want to know if the decisions to invest in R&D are closely related to the level of spillovers flowing between local firms and foreign firms operating in France. In the first chapter, we aim at verifying the existence of knowledge spilovers through two transmission channels: horizontal and vertical ones. We highlight that the know-how spreads on the one hand, between foreign customers and local supplier in the upstream sector (backward linkages) and on the other hand, between local suppliers and foreign customers in the downstream sector (forward linkages). We suggest that, in the French case, the knowledge spillovers occur primarily through backward spillovers, while spillovers within the same sector (horizontal spillovers) and spillovers diffused from the foreign suppliers to the local customers rather act as a brake on the productivity of firms located in France. In the second chapter, we focus on the incentive of firms to further invest in R&D with respect to the intensity of spillovers resulting from these activities. For this purpose, we build a theoretical model to explain the strategies of firms in terms of R&D based on the technological know-how disseminated by a foreign subsidiary in the host country (international R&D spillovers), know-how issued by a local firm (reverse R&D spillovers) and the know-how that being exchanged between the subsidiary firm and its parent company located in its home country (internal technological transfer). We show that taking into account these different channels of exogenous spillovers refers to the prisoner's dilemma where the diffusion of a high and comparable level of know-how encourages firms to invest in R&D and a low level of spillovers compared to a threshold value (determined based on the intensity of competition) forces them to reduce their R&D investment. In a context of asymmetric spillovers, the firm which more absorbs the technology of its competitor increases its investment in R&D. In the last chapter, we focus on international spillovers and reverse spillovers not only from R&D activities but also from outsourcing activities. We suggest that the effects of international spillovers on the productivity of firms in France are more important than those of reverse spillovers. As far as R&D spillovers are concerned, their effect on a firms' productivity is positive and significant in the upstream and downstream sector, but is more important for backward linkages. Concerning spillovers from outsourcing activities, the effect is only in favor of spillovers diffused by the contractor. These effects depend on the technological level of the sector concerned. The effect of spillovers on the productivity seems to be more important for firms belonging to high-tech sectors than for firms belonging to medium- and low-tech sectors.

Die Dissertation befasst sich mit Einkommenszyklen offener Volkswirtschaften. Im Grundmodell werden Einkommensunterschiede der Länder durch verschiedene Lernexternalitäten ausgelöst. Arbeitsteilung im internationalen Handel verfestigt die Ungleichentwicklung. Das Aufkommen neuer Technologien benachteiligt Länder hoher Lernexternalitäten und ermöglicht die Umkehrung der Einkommensunterschiede. Mit immer neuen Technologien geht so ein ständiger Wechsel der Einkommenspositionen einher. In dieses Modell wird in der Dissertation eine Lernfunktion integriert. Erweiterungen befassen sich mit den Veränderungen des Einkommenszyklus durch anreizkompatible Verteilung der Handelsgewinne, durch Auftreten von Spillovers der Lernexternalität zwischen den Ländern und zwischen den Technologiegenerationen und durch Migration von Arbeit.

Die Dissertation befasst sich mit Einkommenszyklen offener Volkswirtschaften. Im Grundmodell werden Einkommensunterschiede der Länder durch verschiedene Lernexternalitäten ausgelöst. Arbeitsteilung im internationalen Handel verfestigt die Ungleichentwicklung. Das Aufkommen neuer Technologien benachteiligt Länder hoher Lernexternalitäten und ermöglicht die Umkehrung der Einkommensunterschiede. Mit immer neuen Technologien geht so ein ständiger Wechsel der Einkommenspositionen einher. In dieses Modell wird in der Dissertation eine Lernfunktion integriert. Erweiterungen befassen sich mit den Veränderungen des Einkommenszyklus durch anreizkompatible Verteilung der Handelsgewinne, durch Auftreten von Spillovers der Lernexternalität zwischen den Ländern und zwischen den Technologiegenerationen und durch Migration von Arbeit.

1 Abstract We study economic policy uncertainty spillovers on a panel of ten countries between April 1998 to September 2019. The analysis is performed on the Economic Policy Uncertainty indices data. To measure the spillovers, we utilize forecast error variance decompositions of VAR model. We found that approximately half of the forecast variance can be explained by spillovers shocks across countries. Further, we disentangle the spillover measure to short-, mid- and long-term cycles using frequency domain. Our results suggest that most of the spillovers are caused by shocks into low frequencies, hence with long persistence. Employing quantile regression on equation-by-equation basis to estimate the VAR model, we find that idiosyncratic uncertainty shocks do not propagate strongly at the median but that powerful spillovers occur in the right tail of distribution. Additionally, we perform rolling window estimates of the spillovers. The results indicate strong variation in time, especially during major geopolitical events, such as Iraq War (2003), Global Financial Crisis (2007-09), European debt crisis (2010-12) or Brexit (2016).

A crescente globalização financeira e integração desses mercados resultaram em relações cada vez mais próximas entre os países, sejam eles desenvolvidos ou emergentes. Esses fenômenos, somados às crises financeiras recentes, provocaram maior interesse nos eventos de transmissão de volatilidade e de fluxos de informações entre os mercados financeiros. Dentre elas, destaca-se a crise financeira internacional de 2008, conhecida como \"crise do subprime\", considerada a maior e mais importante desde a Grande Depressão de 1929. Neste contexto, o mercado de recibos americanos de depósito (ADRs) apresentou uma importância crescente nas últimas décadas, especialmente para companhias sediadas em países emergentes, como os da América Latina. Essa região, particularmente, exibiu uma grande expansão neste mercado. De maneira geral, as empresas de países emergentes emissoras de ADRs possuem características mais similares às companhias sediadas nos mercados desenvolvidos, comparadas às demais de seu país de origem. Por isso, como objetivo geral deste estudo, buscou-se detectar e mensurar o fenômeno da interdependência, englobando os transbordamentos (spillovers) de retornos e de volatilidade e suas assimetrias, entre os principais mercados de capitais da América Latina - Brasil, Argentina, Chile e México - e dos países desenvolvidos - Estados Unidos, Japão, Reino Unido e França - no âmbito da última crise financeira internacional. Esse fenômeno foi investigado considerando tanto seus índices acionários de mercado, como os índices de ADRs criados neste estudo, um para cada mercado da América Latina. Estes foram compostos pelas cotações de seus respectivos ADRs níveis 2 ou 3, sendo que a metodologia desenvolvida para sua criação foi uma das contribuições deste trabalho. A partir das séries temporais de retornos diários logarítmicos dos índices dos oito países no período de junho de 2008 a maio de 2015, foi empregada uma metodologia abrangente. Foram aplicadas três abordagens univariadas para modelagem das volatilidades dos mercados (GARCH, EGARCH e TARCH) e dois modelos multivariados assimétricos VAR-MGARCH, com representação Diagonal VECH, para identificação dos transbordamentos de retornos e volatilidade, bem como a análise de suas correlações condicionais. Além disso, foram estimados dois modelos autorregressivos multivariados (VAR) para análise das relações conjuntas dos mercados, e a análise das Funções de Resposta a Impulso (IRF) e dos efeitos sobre a variância por meio de sua decomposição. Os resultados indicaram que as séries de retornos dos mercados de ADRs de empresas latino-americanas não apresentam comportamento mais similar, no tocante à volatilidade, ao dos principais mercados de capitais desenvolvidos. No entanto, há evidências de que os índices de ADRs possuem maior interdependência com os principais mercados de capitais desenvolvidos, por apresentarem relações mais próximas com esses, comparados aos mercados acionários latino-americanos analisados. Essa conclusão corrobora as hipóteses elaboradas sobre esse tema a partir da teoria de segmentação de mercado e das próprias características dessas companhias. Outro resultado relevante foi que os mercados emergentes da América Latina são mais suscetíveis a efeitos locais e regionais que globais, confirmando o benefício do uso dos ativos financeiros desses países para diversificação de carteiras internacionais, mesmo durante uma crise financeira internacional, como a do subprime. / The growing financial globalization and integration of this markets resulted in increasingly close links between the countries, both developed and emerging ones. These phenomena, added to the recent financial crises, provoked greater interest in the events of volatility and information flows transmission between the financial markets. Among them, stands out the international financial crisis of 2008, known as the \"subprime crisis\", considered the largest and most important since the Great Depression of 1929. In this context, the American Depositary Receipts (ADRs) market showed an increasing importance in recent decades, especially for companies based in emerging markets, such as the Latin America. This region, particularly, exhibited a large expansion in this market. In general, companies in emerging countries issuers of ADRs have more similar characteristics to companies based in developed markets, compared to the rest of their country of origin. Therefore, the general objective of this study was to detect and measure the interdependence phenomenon, encompassing returns and volatility spillovers and their asymmetries, among the major capital markets in Latin America - Brazil, Argentina, Chile and Mexico - and developed countries - United States, Japan, UK and France - within the last international financial crisis. This phenomenon was investigated considering both their stock market indices and the ADRs indices created in this study, one for each Latin America country. They were compound of the quotes from their respective ADRs levels 2 or 3, and the methodology developed for their creation was one of the contributions of this assignment. Using the time series of daily logarithmic returns of the eight countries indices in the period from June 2008 to May 2015, it was applied an embracing methodology. It was estimated three univariate approaches to modeling the markets volatility (GARCH, EGARCH and TARCH) and two asymmetric multivariate models VAR-MGARCH, with Diagonal VECH representation, for identification of the returns and volatility spillovers, as well as analysis of their conditional correlations. In addition, two multivariate autoregressive models (VAR) were estimated for analysis of joint relations of markets, and analysis of Impulse Response Functions (IRF) and the effects on the variance through its decomposition. The results indicated that the returns series from Latin American ADR markets doesn\"t have behavior more similar, with regard to volatility, to the major developed capital markets. However, there is evidence that the ADR indices present greater interdependence with the major developed capital markets, because they have closer relationships with these, compared to the Latin American equity markets analyzed. This finding supports the hypothesis elaborated on this subject from the market segmentation theory and the characteristics of these companies. Another important result was that the emerging markets of Latin America are more susceptible to local and regional effects than global ones, confirming the benefit of the use of the financial assets of these countries for diversification of international portfolios, even during an international financial crisis, such as the subprime.

Questa tesi e’ composta da cinque articoli sui temi dell’innovazione, diffusione e adozione di tecnologie energetiche efficienti. Il primo capitolo presenta una rassegna della letteratura empirica sulle dinamiche del cambiamento tecnologico in campo ambientale. Il secondo capitolo studia le piu’ importanti determinanti del flusso di conoscenza. Il terzo capitolo identifica le maggiori determinanti di domanda e offerta dell’innovazione, con particolare attenzione al ruolo della conoscenza internazionale. I risultati presentati mostrano come gli spillover di conoscenza favoriscano ulteriori innovazioni. I capitoli quarto e quinto studiano il settore di produzione dell’energia elettrica. Il capitolo quarto presenta un database di brevetti in technologie energetiche efficienti. Il capitolo quinto studia le determinanti dell’efficienza energetica nella produzione di energia elettrica da fonti fossili, con particolare attenzione al ruolo della tecnologia. / This dissertation is a collection of essays on innovation, diffusion and adoption of energy technologies. Chapter 1 presents a state-of-the art review of empirical contributions on TC dynamics as applied to eco-innovation. Chapter 2 explores the main determinants of knowledge flows and how they favor or hinder the flow of knowledge across border. Both geographical and technological distance hinder the flow of eco-knowledge. Chapter 3 identifies the main demand and supply-side determinants of innovation, with particular attention to the role of foreign knowledge. I point to the importance of knowledge spillovers in fostering further eco-innovation, especially in countries with medium to low innovative abilities. Chapters 4 and 5 focus on TC in the electricity sector, a main contributor to GHG emissions. In Chapter 4 presents the data selection process used to identify patents in efficient fossil electricity technologies and provides a worldwide analysis of innovation trends in these technologies. Chapter 5 studies the evolution of energy efficiency in fossil-fuel based electricity production, devoting particular attention to the contribution of knowledge to production efficiency.

A crescente globalização financeira e integração desses mercados resultaram em relações cada vez mais próximas entre os países, sejam eles desenvolvidos ou emergentes. Esses fenômenos, somados às crises financeiras recentes, provocaram maior interesse nos eventos de transmissão de volatilidade e de fluxos de informações entre os mercados financeiros. Dentre elas, destaca-se a crise financeira internacional de 2008, conhecida como \"crise do subprime\", considerada a maior e mais importante desde a Grande Depressão de 1929. Neste contexto, o mercado de recibos americanos de depósito (ADRs) apresentou uma importância crescente nas últimas décadas, especialmente para companhias sediadas em países emergentes, como os da América Latina. Essa região, particularmente, exibiu uma grande expansão neste mercado. De maneira geral, as empresas de países emergentes emissoras de ADRs possuem características mais similares às companhias sediadas nos mercados desenvolvidos, comparadas às demais de seu país de origem. Por isso, como objetivo geral deste estudo, buscou-se detectar e mensurar o fenômeno da interdependência, englobando os transbordamentos (spillovers) de retornos e de volatilidade e suas assimetrias, entre os principais mercados de capitais da América Latina - Brasil, Argentina, Chile e México - e dos países desenvolvidos - Estados Unidos, Japão, Reino Unido e França - no âmbito da última crise financeira internacional. Esse fenômeno foi investigado considerando tanto seus índices acionários de mercado, como os índices de ADRs criados neste estudo, um para cada mercado da América Latina. Estes foram compostos pelas cotações de seus respectivos ADRs níveis 2 ou 3, sendo que a metodologia desenvolvida para sua criação foi uma das contribuições deste trabalho. A partir das séries temporais de retornos diários logarítmicos dos índices dos oito países no período de junho de 2008 a maio de 2015, foi empregada uma metodologia abrangente. Foram aplicadas três abordagens univariadas para modelagem das volatilidades dos mercados (GARCH, EGARCH e TARCH) e dois modelos multivariados assimétricos VAR-MGARCH, com representação Diagonal VECH, para identificação dos transbordamentos de retornos e volatilidade, bem como a análise de suas correlações condicionais. Além disso, foram estimados dois modelos autorregressivos multivariados (VAR) para análise das relações conjuntas dos mercados, e a análise das Funções de Resposta a Impulso (IRF) e dos efeitos sobre a variância por meio de sua decomposição. Os resultados indicaram que as séries de retornos dos mercados de ADRs de empresas latino-americanas não apresentam comportamento mais similar, no tocante à volatilidade, ao dos principais mercados de capitais desenvolvidos. No entanto, há evidências de que os índices de ADRs possuem maior interdependência com os principais mercados de capitais desenvolvidos, por apresentarem relações mais próximas com esses, comparados aos mercados acionários latino-americanos analisados. Essa conclusão corrobora as hipóteses elaboradas sobre esse tema a partir da teoria de segmentação de mercado e das próprias características dessas companhias. Outro resultado relevante foi que os mercados emergentes da América Latina são mais suscetíveis a efeitos locais e regionais que globais, confirmando o benefício do uso dos ativos financeiros desses países para diversificação de carteiras internacionais, mesmo durante uma crise financeira internacional, como a do subprime. / The growing financial globalization and integration of this markets resulted in increasingly close links between the countries, both developed and emerging ones. These phenomena, added to the recent financial crises, provoked greater interest in the events of volatility and information flows transmission between the financial markets. Among them, stands out the international financial crisis of 2008, known as the \"subprime crisis\", considered the largest and most important since the Great Depression of 1929. In this context, the American Depositary Receipts (ADRs) market showed an increasing importance in recent decades, especially for companies based in emerging markets, such as the Latin America. This region, particularly, exhibited a large expansion in this market. In general, companies in emerging countries issuers of ADRs have more similar characteristics to companies based in developed markets, compared to the rest of their country of origin. Therefore, the general objective of this study was to detect and measure the interdependence phenomenon, encompassing returns and volatility spillovers and their asymmetries, among the major capital markets in Latin America - Brazil, Argentina, Chile and Mexico - and developed countries - United States, Japan, UK and France - within the last international financial crisis. This phenomenon was investigated considering both their stock market indices and the ADRs indices created in this study, one for each Latin America country. They were compound of the quotes from their respective ADRs levels 2 or 3, and the methodology developed for their creation was one of the contributions of this assignment. Using the time series of daily logarithmic returns of the eight countries indices in the period from June 2008 to May 2015, it was applied an embracing methodology. It was estimated three univariate approaches to modeling the markets volatility (GARCH, EGARCH and TARCH) and two asymmetric multivariate models VAR-MGARCH, with Diagonal VECH representation, for identification of the returns and volatility spillovers, as well as analysis of their conditional correlations. In addition, two multivariate autoregressive models (VAR) were estimated for analysis of joint relations of markets, and analysis of Impulse Response Functions (IRF) and the effects on the variance through its decomposition. The results indicated that the returns series from Latin American ADR markets doesn\"t have behavior more similar, with regard to volatility, to the major developed capital markets. However, there is evidence that the ADR indices present greater interdependence with the major developed capital markets, because they have closer relationships with these, compared to the Latin American equity markets analyzed. This finding supports the hypothesis elaborated on this subject from the market segmentation theory and the characteristics of these companies. Another important result was that the emerging markets of Latin America are more susceptible to local and regional effects than global ones, confirming the benefit of the use of the financial assets of these countries for diversification of international portfolios, even during an international financial crisis, such as the subprime.

A partir des années quatre-vingt, la manière d’appréhender les investissements directs étrangers (IDE) a basculé. Les firmes multinationales (FMN) sont perçues progressivement comme les acteurs centraux du processus de globalisation. Une littérature abondante commence à émerger et décrit le rôle des IDE comme composante non négligeable dans la stratégie de développement industriel d’un pays. Comprendre par quels mécanismes les IDE interviennent dans la dynamique industrielle d’une économie signifie qu’ils sont susceptibles de générer des retombées positives, autrement dit des spillovers sur celle-ci. Etudier l’impact des IDE sur la dynamique industrielle d’une économie en transition, telle que la République tchèque devient donc une question pertinente. L’objectif de notre travail est de comprendre l’impact des IDE sur les économies en transition à travers l’étude de la productivité totale des facteurs (PTF) et des spillovers (autrement dit des externalités positives). Les questions sous-jacentes sont les suivantes : les IDE induisent-ils un effet d’entraînement ou un effet d’éviction de l’investissement local? Quel est l’impact des IDE sur la productivité du pays d’accueil ? Observe-t-on des spillovers en matière de transfert de technologie vers les entreprises locales ? Précisons toutefois que la littérature théorique et empirique est très riche. Se concentrer uniquement sur la PTF et sur les spillovers comme nous le faisons ne permet pas de conclure précisément sur l’impact des IDE ; il existe, en effet un grand nombre d’impacts que nous ne traitons pas. Nous arrivons toutefois à étudier l’impact des IDE sur la structure industrielle de la République tchèque à travers l’analyse de la PTF et des spillovers. Nos résultats nous permettent aussi de réfléchir aux implications en termes de politiques incitatives à l’égard des IDE ainsi qu’en termes de déterminants incitant les FMN à investir. Nous essayons enfin de comprendre de quelle manière la République tchèque peut décider de politiques publiques visant à rendre ses entreprises plus compétitives face aux FMN. / Since the 1980s, the approach to foreign direct investment (FDI) has changed. Multinational companies (MNCs) are viewed incrementally as the central actors of the globalization process. Extensive literature is emerging, which describes FDI as a significant component of a country’s industrial development strategy. The understanding of the mechanisms by which FDI intervene in industrial dynamics of an economy has shown that they are likely to generate benefits, in other words, spillovers. Studying the impact of FDI on industrial dynamics of a transition economy, such as the Czech Republic, thus becomes a relevant issue. The aim of our work is to understand the impact of FDI on transition economies through investigating total factor productivity (TFP) and spillovers (i.e. positive externalities). The underlying questions are: Do FDI cause a knock-on effect or crowding out of local investment? What is the impact of FDI on the productivity of the host country? Are spillovers observed in terms of technology transfer to local businesses? Herein we carefully investigated the impacts of FDI on the industrial structure of the Czech Republic through the analysis of TFP and spillovers. Although extensive theoretical and empirical literature exists; focusing exclusively on TFP and spillovers does not allow direct conclusion on the impact of FDY, since different other factors were not examined. Nevertheless, our results also enable to deliberate on the implications of incentive policies towards FDI and determinants encouraging MNCs to invest. Eventually, we evaluate how the Czech Republic may set public policies to make its companies more competitive against FMN.