Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?

By Holger Görg, D. Greenaway. Social Science Research Network, 2004

1,960 citations recorded by the source corpus.

Governments the world over offer significant inducements to attract investment, motivated by the expectation of spillover benefits to augment the primary benefits of a boost to national income from new investment. There are several possible sources of induced spillovers from foreign direct investment. This article evaluates the empirical evidence on productivity, wage, and export spillovers in developing, developed, and transition economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is at best mixed. The article explores the reasons and concludes with a review of policy aspects.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/e77e013b0d4c34b2479bfb19321a6bf08e6d0ddc

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Citations in the corpus

FDI Spillovers and Time Since Foreign Entry (2014, positive): “For a long panel (1982-95) of firms in the Irish electronics sector Görg and Ruane (2001) find indications that foreign firms indeed start off with a relatively low extent of local linkages, but as they get accustomed, they proceed to develop more local input linkages.”
Learning from Trade Through Innovation (2010, neutral): “…been found in favor of local firms learning through horizontal spillovers stemming from competition of foreign affi liates in the same industries (Görg and Greenaway, 2004).1 Similarly, another strain of the literature exploring the learning-by-exporting hypothesis, found quite striking…”
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).”
Do local manufacturing firms benefit from transactional linkages with multinational enterprises in China? (2009, background): “In a recent survey, Görg and Greenaway (2004) find only twenty two out of the forty selected studies of horizontal productivity”
Do Firms Learn from International Trade? (2006, background): “3 See Blomström and Kokko (1997) and Görg and Greenaway (2002) for reviews of the literature on knowledge diffusion and FDI.”
Foreign Direct Investment and R&D: Substitutes or Complements—A Case of Indian Manufacturing after 1991 Reforms (2011, background): “See Görg and Greenaway (2004) for an excellent survey of literature.”
Technology spillovers from foreign direct investment in Vietnam: horizontal or vertical spillovers? (2011, background): “For a survey of the literature on spillovers from FDI, see Blomstrom and Kokko (1998) and Gorg and Greenaway (2004).”
Effects of Selected Corporate Governance Characteristics on Firm Performance: Empirical Evidence from Kenya (2011, background): “According to Gorg and Greenaway (2004), the main challenging question in the international business strategy is the outcome gained from foreign ownership of firms.”
Estimating vertical spillovers from FDI: Why results vary and what the true effect is (2011, methodology): “We employed the following strategy for literature search: After reviewing the references of literature surveys (Görg & Greenaway, 2004; Smeets, 2008; Meyer & Sinani, 2009) and a few recent empirical studies, we elaborated a baseline search query that was able to capture most of the relevant…”
Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States (2003, neutral): “7 Two recent surveys come to the same conclusion, see Hanson (2001), Görg and Greenaway (2002). See also the related paper by Griffith, Redding, and Simpson (2003).”