Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages
Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

Author: Beata Smarzynska Javorcik

Publisher:

Published: 2015

Total Pages: 0

ISBN-13:

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Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?
Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?

Author: Jonathan Haskel

Publisher:

Published: 2002

Total Pages: 52

ISBN-13:

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Are there productivity spillovers from FDI to domestic firms, and, if so, how much should host countries be willing to pay to attract FDI? To examine these questions we use a plant-level panel covering U.K. manufacturing from 1973 through 1992. Across a wide range of specifications, we estimate a significantly positive correlation between a domestic plant's TFP and the foreign-affiliate share of activity in that plant's industry. This is consistent with positive FDI spillovers. We do not generally find significant effects on plant TFP of the foreign-affiliate share of activity in that plant's region. Typical estimates suggest that a 10 percentage-point increase in foreign presence in a U.K. industry raises the TFP of that industry's domestic plants by about 0.5 percent. We also use these estimates to calculate the per-job value of these spillovers. These calculated values appear to be less than per-job incentives governments have granted in recent high-profile cases, in some cases several times less.

How Does Foreign Direct Investment Affect Economic Growth
How Does Foreign Direct Investment Affect Economic Growth

Author: Mr.Eduardo Borensztein

Publisher: International Monetary Fund

Published: 1994-09-01

Total Pages: 26

ISBN-13: 1451853270

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We test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. In addition, FDI has the effect of increasing total investment in the economy more than one for one, which suggests the predominance of complementarity effects with domestic firms.

Multinational Enterprises, International Trade, and Productivity Growth
Multinational Enterprises, International Trade, and Productivity Growth

Author: Wolfgang Keller

Publisher: International Monetary Fund

Published: 2003-12-01

Total Pages: 41

ISBN-13: 1451875894

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We estimate international technology spillovers to U.S. manufacturing firms via imports and foreign direct investment (FDI) between 1987 and 1996. In contrast to earlier work, our results suggest that FDI leads to substantial productivity gains for domestic firms. The size of FDI spillovers is economically important, accounting for about 11 percent of productivity growth in U.S. firms between 1987 and 1996. In addition, there is some evidence for import-related spillovers, but it is weaker than for FDI spillovers. The paper also gives a detailed account of why our study leads to results different from those found in previous work. This analysis indicates that our results are also likely to apply to other countries and periods.

Foreign Direct Investment in the World Economy
Foreign Direct Investment in the World Economy

Author: Mr.Edward M. Graham

Publisher: International Monetary Fund

Published: 1995-06-01

Total Pages: 36

ISBN-13: 1451847904

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The role of foreign direct investment (FDI) in international capital flows is examined. Theories of the determinants of FDI are surveyed, and the economic consequences of FDI for both host (recipient) and home (investor) nations are examined in light of empirical studies. Policy issues surrounding possible negotiation of a “multilateral agreement on investment” are discussed.

Closing The Eu East-west Productivity Gap: Foreign Direct Investment, Competitiveness And Public Policy
Closing The Eu East-west Productivity Gap: Foreign Direct Investment, Competitiveness And Public Policy

Author: David A Dyker

Publisher: World Scientific

Published: 2006-06-15

Total Pages: 221

ISBN-13: 1908979984

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A product of the Framework V research project, this book addresses one of the key problems facing the EU today: Why is the ‘new’ EU so much poorer than the ‘old’, and how will EU enlargement help to solve the problem? Focusing on the productivity problems underlying the East-West gap, it looks in particular at the role that foreign investment and R&D can play in closing it. Against that background, the book assesses what role proactive development policy might play in attacking the roots of low social productivity. Concluding that there will be a clear-cut process of convergence between East and West, albeit an incomplete one, it finishes with an assessment of the patterns of competitiveness, East and West, that are likely to emerge from this process of incomplete convergence.The material is based on a rich archive of empirical material which no competing title can match, and combines in-depth interviews with standard quantitative approaches and critical policy analysis.