Strengthening FDI and SME Linkages in Portugal

image of Strengthening FDI and SME Linkages in Portugal

This report assesses the enabling conditions for maximising the benefits of foreign direct investment (FDI) on SME productivity and innovation in Portugal. It looks at the quality of investment that Portugal attracts and the capacity of Portuguese SMEs to benefit from any knowledge and technology spillovers resulting from these investments. It studies the extent to which FDI-SME spillovers occur through value chain linkages, strategic partnerships, labour mobility, competition and imitation effects. The report provides an overview of Portuguese public institutions responsible for investment, SMEs, innovation and regional development policies, taking a close look at arrangements to ensure multi-level policy coordination, stakeholder consultation and evaluation of policy impacts. It then reviews the mix of government policies that are currently in place to support FDI-SME linkages and spillovers, noting areas for further policy reforms. The last chapter introduces a regional lens, focusing in particular on the regions of Norte and Alentejo. This report is part of a broader European Commission-OECD programme on strengthening FDI-SME linkages and serves as a pilot for future country assessments.


The policy mix for FDI diffusion on Portuguese SMEs

This chapter reviews the mix of policies in place for fostering FDI spillovers on the productivity and innovation of Portuguese SMEs. It identifies the FDI-SME diffusion channels and enabling factors that are effectively supported by Portugal’s policy framework, and the policy instruments used to promote FDI-SME linkages, noting areas for further policy development or a shift in the policy mix. It also conducts an assessment of various aspects of regulation impacting the diffusion of knowledge from foreign to domestic firms, focusing on investment and trade openness, competition and labour market regulations.


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