When Does FDI Have Positive Spillovers? Evidence from 17 Transition Market Economies

By Y. Gorodnichenko, Jan Svejnar, Katherine Terrell. Social Science Research Network, 2014

209 citations recorded by the source corpus.

We use rich firm-level data and national input–output tables from 17 countries over the 2002–2005 period to test new and existing hypotheses about the impact of foreign direct investment (FDI) on the efficiency of domestic firms in the host country (i.e., spillovers). We document that backward linkages have a consistently positive effect on productivity of domestic firms while horizontal and forward linkages show no consistent effect. We also examine how the strength of spillovers varies by sector, FDI source, institutional environment (corruption, red tape, level of development), firm’s distance to the technological frontier, and other firm- and country-specific characteristics.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/123cd22bbdde7a43a9f3d59237d2fdae5f11ce12

Citations in the corpus

• Economic reforms and industrial policy in a panel of Chinese cities (2016, unknown): “Appendix Table A9 shows that the e¤ect of SEZ on population in nearby cities is positive, but usually not signi cant.51 One possible channel for productivity spillovers is foreign direct investment (see Gorodnichenko et al. 2014), an explicit target of SEZ.”
• Misallocation and Capital Market Integration: Evidence From India (2020, unknown): “TFPQ. Motivated by the literature documenting a relationship between FDI and within-firm productivity due to technological transfers (e.g., Keller and Yeaple, 2009; Gorodnichenko, Svejnar, and Terrell, 2014), Table 7 estimates the effects of the reform on TFPQ.”