Determinant Factors of FDI Spillovers – What Do We Really Know?

By Nuno Crespo, M. P. Fontoura. 2007

833 citations recorded by the source corpus.

Empirical evidence about FDI spillovers to domestic firms has provided mixed results. This global evaluation has recently been complemented with the analysis of the factors that determine the existence, dimension and sign of FDI spillovers. We survey the arguments that support these factors and analyze the empirical evidence already produced. FDI spillovers depend on many factors, frequently with an indeterminate effect. Absorptive capacity of domestic firms and regions are a precondition for incorporating the benefits of FDI spillovers. Concerning the remaining factors, the results suggest opposite effects or, in some cases, are still insufficient to legitimate decisive conclusions.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/55aa15056866f6d74f7874dad9a498e3fa99690e

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Citations in the corpus

Technology transfers, foreign investment and productivity spillovers (2015, background): “The final stage of our analysis attempts to disentangle whether the FDI spillovers detected are associated with the characteristics of domestic firms, in particular measures of their absorptive capacity (Crespo and Fontoura, 2007; Marin and Bell, 2006).”
Multinational corporations’ economic and human rights impacts on developing countries: a review and research agenda (2014, background): “…that the smaller these differences, the higher the probability that the host country firms can take advantage of the presence of foreign investors (Crespo and Fontoura, 2007), while other scholars maintain that high physical and cultural distance between the headquarters and the subsidiary imply…”
Export upgrading and growth: the prerequisite of domestic embeddedness (2013, background): “For example, potential technological spillovers may be hampered by limited domestic absorption capacity or the absence of substantial and well-directed technological efforts by foreign and domestic firms (Crespo and Fontoura, 2007).”
Foreign multinationals and domestic innovation: Intra-industry effects and firm heterogeneity (2015, background): “Demonstration effects rely on the benefits arising from the exposure of domestic firms to the superior technology of MNEs subsidiaries (Girma et al., 2001; Gorg and Greenaway, 2004; Crespo and Fontoura, 2007; Smeets, 2008).”
Determinants of Industrial Innovation in China: Evidence From its Recent Economic Census (2010, background): “…will not be able to completely internalize such benefits, and domestic firms will learn from foreign companies through spillover channels including demonstration/imitation, labor movement, exports, competition and backward and forward linkages with domestic firms (Crespo and Fontoura, 2007).”
Foreign direct investments, institutional quality, and economic growth (2019, background): “The spillover happens through domestic firms imitating the technology demonstrated by the multinational enterprise (MNE), competition, skilled labor mobility and backward and forward linkages as found by Crespo and Fontoura (2007).”
Economic upgrading through global value chain participation: which policies increase the value-added gains? (2017, background): “A country’s trade policy regime is related to its capacity to attract foreign firms because foreign investors are less constrained by the size and efficiency of the local market (Crespo and Fontoura 2007).”
A Meta-Analysis of FDI and Productivity Spillovers in Developing Countries (2017, background): “Theoretically, intrasector spillovers are assumed to occur through the transmission channels of demonstration, labor mobility, competition and/or export effects (Javorcik, 2004; Crespo and Fontoura, 2007; Jordaan, 2012).”
FDI Spillovers and Time Since Foreign Entry (2014, neutral): “the survey by Crespo and Fontoura, 2007). Absorptive capacity refers to the ability of firms to assimilate outside knowledge and technology. Blomström (1986) finds that foreign firms are more likely to eliminate the local competition when the initial level of technology is low and human capital is p”
Cross sectoral FDI spillovers and their impact on manufacturing productivity (2018, result): “In line with other studies, this result confirms the role of firm’s absorptive capacity as an enabling 22 factor for FDI spillovers (Crespo and Fontoura, 2007; Blalock and Gertler, 2008; Damijan et al., 2013).”