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 global financial crisis has contributed to the redirection of trade towards new markets outside the OECD area, where both demand patterns and the institutional environment differ from those in the OECD. This study provides an empirical examination of the consequences of this shift, based on Swedish firm-level trade data. Results suggest that weak institutions hamper trade and reduce the length of trade relations, especially for small firms. Trade in industries that are characterized by a high frequency of trade conflicts and where transactions require extensive relationship-specific investments are particularly difficult to redirect towards markets with weak institutions.

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Redirecting International Trade: Contracts, Conflicts, and Institutions

This article examines the distribution of antidumping (AD) disputes across countries and industries, and examines which AD cases reach the dispute settlement system of the WTO. Our general finding is that neither the country nor the industry distribution of AD cases remains constant across the different levels of disputes, as cases proceed from notifications to requests for consultations and third party adjudication at the WTO. The US is the main user of AD measures, as well as the main target for complaints at the WTO’s Dispute Settlement Body. However, emerging markets have increasingly started using AD law to protect their domestic firms. We find that the typical AD notification is submitted by an upper middle-income country, and it focuses on a medium low-technology industry with differentiated products, but low relationship-specificity. The most typical complainant at the WTO is also an upper middle-income country, challenging a high-income country (most likely the US) that is allegedly giving unfair protection to an industry producing differentiated goods that are not very relationship-specific, using medium-low technologies. The analysis also reveals that when lower middle-income countries are challenged at the WTO, disputes are often resolved before third party adjudication is needed.

Which Antidumping Cases Reach the WTO

Small and medium sized enterprises (SMEs) have been important for Vietnam’s rapid economic development. However, the context in which SMEs operate are rapidly changing with the current internationalisation of the Vietnamese economy. The question posed in this paper is “How are Vietnam’s SMEs affected by the internationalization process?” This will give an indication of what challenges lie ahead if the plans for further trade liberalization and internationalization are realized. The basis of our analysis is a unique database on the activities of a large sample of Vietnamese SMEs in 1990, 1996, and 2002, with quantitative data about various aspects of company operations, as well as qualitative information about the entrepreneurs’ perceptions of the current business environment and expectations about the future.

The Internationalization of Vietnamese SMEs

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.

Ari Kokko

Papers

Redirecting International Trade: Contracts, Conflicts, and Institutions

Which Antidumping Cases Reach the WTO

The Internationalization of Vietnamese SMEs

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

The Nordic and Asian Crises: Common Causes, Different Outcomes