Showing papers by "Ari Kokko published in 2001"

The determinants of host country spillovers from foreign direct investment: a review and synthesis of the literature

Abstract: The existence of spillover efficiency benefits to host country economies from inward foreign direct investment (FDI) is well documented in the literature.1 The determinants of the size and scope of the spillover benefits have also been studied, but they are not as clearly and consistently documented as the existence and magnitude of the relevant externalities.

Trade regimes and spillover effects of FDI: Evidence from Uruguay

Abstract: Trade Regimes and Spillover Effects of FDI: Evidence from Uruguay. — This paper examines differences in the character and impact of FDI entering Uruguay during import substitution, pursued until 1973, and the subsequent more outwardoriented trade regime. Regression analysis shows that the labor productivity of local firms is positively related to the presence of older import-substituting MNCs in their industry. The presence of foreign affiliates established after 1973 has no apparent impact on local productivity, but seems to raise the likelihood that local firms engage in exporting. This may be a sign of export spillovers, indicating that local firms may pick up some exportrelated skills from the operations of outward-oriented foreign MNCs.

Foreign direct investment and spillovers of technology

Abstract: This paper summarises some of the literature on the links between FDI and the transfer and diffusion of technology. We argue that the positive effects of FDI postulated in much of the recent debate are not automatic, that the effects of FDI will vary depending on the host country's characteristics and policies, and that there is a role for economic policy in maximising the potential benefits of FDI. Many developing countries have traditionally relied on a combination of various fiscal incentives and performance and technology transfer requirements to attract foreign multinational firms and to control their operations. However, these measures may not be sufficient to generate significant knowledge spillovers if the majority of local firms employ technologies that are very different from those used by foreigners. The studies reviewed in the paper suggest two additional areas for host country policy. Firstly, policies to support local technological capability and labour skills may facilitate spillovers of technology from foreign MNCs. The reason is not only that the local industry's ability to absorb foreign technology improves, but also that a more skilled local labour force reduces the costs of intra-firm technology transfer within the MNC, which is likely to encourage affiliates to import "more" technology from their parents. Secondly, policies to ensure that the foreign affiliates operate in a competitive environment appear to be essential. Foreign MNCs that are protected by trade or entry barriers can afford to employ obsolete technologies and still generate significant profits, without generating much diffusion of valuable knowledge and skills to local firms. Foreign MNCs facing national or international competition, by contrast, must continuously adjust their operations and technologies to changing market conditions, which creates a greater potential for spillovers to local industry

The determinants of host country spillovers from foreign direct investment: a review and synthesis of the literature

Abstract: The existence of spillover efficiency benefits to host country economies from inward foreign direct investment (FDI) is well documented in the literature.1 The determinants of the size and scope of the spillover benefits have also been studied, but they are not as clearly and consistently documented as the existence and magnitude of the relevant externalities.