January 1, 2025SAGE OpenOpen Access

Impacts of FDI Linkages on the Labor Productivity of Domestic Firms: The Role of Local Business Environment

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Linkages with foreign-invested firms positively impact domestic firms' labor productivity.
This positive effect is significantly stronger in an improved local business environment.
The enhancement is especially pronounced among smaller firms in medium- and high-technology industries.
Recommendations highlight the importance of enhancing local business conditions to support firms in transition economies.

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Observational analysis reveals improved labor productivity in domestic firms due to FDI linkages, suggesting local business environment enhancements.

Nam et al. (2025) studied this question.

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Observational analysis reveals improved labor productivity in domestic firms due to FDI linkages, suggesting local business environment enhancements.