Countries strive to attract foreign direct investment hoping that knowledge brought by
multinationals will spill over to domestic producers. While the literature has cast doubt on the
existence of spillovers within industries, it has found evidence of spillovers from multinationals
to the supplying sectors. However, the existing studies rely on industry-level proxies rather than
information on actual relationships between suppliers and multinationals. This study goes one
step further by employing a unique dataset from the Czech Republic where such relationships can
be identified. It finds evidence consistent with both high productivity firms having a higher
probability of supplying multinationals as well as suppliers learning from their relationships with
multinationals