计量经济分析 = Econometric analysis

World Investment Report

Many countries compete against one another in attracting foreign investors by offering ever more generous incentive packages and justifying their actions with the productivity gains that are expected to accrue to domestic producers from knowledge externalities generated by foreign affiliates. Despite this being hugely important to public policy choices, there is little conclusive evidence indicating that domestic firms benefit from foreign presence in their sector. It is possible, though, that researchers have been looking for foreign direct investment (FDI) spillovers in the wrong place. Multinationals have an incentive to prevent information leakage that would enhance the performance of their local competitors in the same industry but at the same time may want to transfer knowledge to their local suppliers in other sectors. Spillovers from FDI may be, therefore, more likely to take place through backward linkages - that is, contacts between domestic suppliers of intermediate inputs and their multinational clients - and thus would not have been captured by the earlier literature. This paper focuses on the understudied issue of FDI spillovers through backward linkages and goes beyond existing studies by shedding some light on factors driving this phenomenon. It also improves over existing literature by addressing several econometric problems that may have biased the results of earlier research. Based on a firm-level panel data set from Lithuania, the estimation results are consistent with the existence of productivity spillovers. They suggest that a 10 percent increase in the foreign presence in downstream sectors is associated with 0.38 percent rise in output of each domestic firm in the supplying industry. The data indicate that these spillovers are not restricted geographically, since local firms seem to benefit from the operation of downstream foreign affiliates on their own, as well as in other regions. The results further show that greater productivity benefits are associated with domestic-market, rather than export-oriented, foreign affiliates. But no difference is detected between the effects of fully-owned foreign firms and those with joint domestic and foreign ownership. The findings of a positive correlation between productivity growth of domestic firms and the increase in multinational presence in downstream sectors should not, however, be interpreted as a call for subsidizing FDI. These results are consistent with the existence of knowledge spillovers from foreign affiliates to their local suppliers, but they may also be a result of increased competition in upstream sectors. While the former case would call for offering FDI incentive packages, it would not be the optimal policy in the latter. Certainly more research is needed to disentangle these two effects. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the contribution of trade and foreign direct investment to technology transfer.

Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant productivity (the 'own-plant' effect), but this relationship is only robust for small enterprises. They then test for spillovers from joint ventures to plants with no foreign investment. Foreign investment negatively affects the productivity of domestically owned plants. The net impact of foreign investment, taking into account these two offsetting effects, is quite small. The gains from foreign investment appear to be entirely captured by joint ventures.

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Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela

The East Asian miracle: Economic growth and public policy: By the World Bank. (New York: Oxford University Press for the World Bank, 1993. 389 pp. $19.95, paper.)

The operations of multinational corporations continue to stir strong emotions, both in the home countries and abroad. In the major home countries, the debate on foreign direct investment has ranged from worries that outward FDI may substitute for domestic investment and erode technology leadership, to the argument that firms must invest abroad in order to stay competitive in an increasingly international environment. The attitudes towards MNCs have also been mixed in the host countries, although the proponents of FDI seem to have gained the upper hand since the late 1980s. Most host countries have liberalized their FDI regulations since the early 1980s — many are now actively trying to encourage foreign firms to invest — and the benefits of inward FDI on capital formation, employment, exports and technology are generally considered to dominate the costs of foreign ownership of local factors of production.

Multinational Corporations and Spillovers

Foreign Direct Investment

Technology, market characteristics, and spillovers

The attitude towards inward foreign direct investment (FDI) has changed considerably over the last couple of decades, as most countries have liberalised their policies to attract investment from foreign multinational corporations (MNCs). On the expectation that foreign MNCs will raise employment, exports or tax revenue, or that some of the knowledge brought by the foreign companies may spill over to the host country’s domestic firms, governments across the world have lowered various entry barriers and opened up new sectors to foreign investment. An increasing number of host governments also provide various forms of investment incentives to encourage foreign-owned companies to invest in their jurisdiction.1 These include fiscal incentives such as tax holidays and lower taxes for foreign investors, financial incentives such as grants and preferential loans to MNCs, as well as measures such as market preferences, infrastructure and sometimes even monopoly rights.2

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The Economics of Foreign Direct Investment Incentives

This paper examines intra-industry spillovers from FDI in Uruguayan manufacturing plants in 1988, to determine whether differences in the technology gap between locally- owned plants and foreign affiliates have any impact on the relation between local productivity and foreign presence. We find a positive and statistically significant spillover effect only in a sub-sample of locally-owned plants with moderate technology gaps vis-a-vis foreign firms. Our interpretation is that there are firm-specific differences in the ability to absorb spillovers, and that these may explain some of the contradictory findings of earlier spillover studies.

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Ari Kokko

Papers

Multinational Corporations and Spillovers

Foreign Direct Investment

Technology, market characteristics, and spillovers

The Economics of Foreign Direct Investment Incentives

Productivity spillovers from FDI in the Uruguayan manufacturing sector.