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.

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.

Foreign Direct Investment in Europe
Foreign Direct Investment in Europe

Author: Klaus Liebscher

Publisher: Edward Elgar Publishing

Published: 2007-01-01

Total Pages: 289

ISBN-13: 1847208797

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This book provides authoritative academic and professional insights into the effects of foreign direct investment (FDI) on home and host countries. It highlights global trends and patterns, and explores related policy challenges all with a special focus on the countries in Central, Eastern and South-Eastern Europe. The book cuts through the existing data fog by offering a wide range of up-to-date academic findings and institutional expertise. Those findings are rounded off with lessons to be learned from historical developments (Ireland s success story), an evaluation of current trends (the role of China) and an investment promotion agency policy for attracting sustainable investment (CzechInvest). Contributions made by central bank officials, institutional representatives, members of academia and professionals provide for a uniquely complementary view on FDI developments and their implications. At a time of big changes in the FDI landscape, this book offers both empirical and econometric evidence on foreign direct investment and will be of great interest to economists and other experts in the fields of economic policy and European integration from central, commercial and investment banks, governments, international organizations, universities and research institutes. The special focus on FDI will attract those interested in, or directly involved in tackling the challenges of attracting sustainable investment or investing successfully abroad.

Local Institutions, Foreign Direct Investment and Productivity of Domestic Firms
Local Institutions, Foreign Direct Investment and Productivity of Domestic Firms

Author: Junjie Hong

Publisher:

Published: 2016

Total Pages: 0

ISBN-13:

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This paper examines the linkage between foreign direct investment (FDI) and the productivity of domestic firms, paying particular attention to local institutions. Using Chinese manufactures from 1998 to 2007, we find strong evidence that FDI negatively affects the productivity of domestic firms. Firm in regions with better institutions suffers more from foreign presence owing to production contraction, labor cost increases and innovation deterrence.