Matous Kostlivy

Title: 'Multinational Enterprises and Spillover Effects in the National Economy: The Case of Czech ICT Sector'

Supervisor: Dr. Tarmo Kalvet

Opponent: Prof. Dr. Robert Krimmer

Defense: 9 June 2015


Abstract: Due to the significant inflow of FDI, the Czech Republic is a home to several MNEs. Significant number of these is formed by the MNEs in the ICT sector. The aim of the study is to define the major channels for spillovers of innovations, processes and knowledge and define in what way, to what extent and whether at all the spillovers in the Czech ICT sector occur. To tackle the problem, qualitative research approach, based on document analysis and semi-structured interviews with relevant professionals, has been executed. The study shows that the vertical linkages in services industry are not as relevant as the theory would suggest. On the other hand, horizontal linkages are a carrier of spillovers, as through the local competition, companies get to innovate. Other spillover channels in the Czech ICT sector include cooperation with local universities as well as transfer of knowledge through the labour mobility. The absorption capacity based on quality education system, skilled labour force and stable economic environment is the factor enabling spillovers to happen in the Czech ICT sector and MNEs are benefiting from that.

Keywords: Spillover effects, ICT, multinational enterprises, Czech Republic, horizontal linkages, vertical linkages, knowledge transfer, innovation