Journal ArticleDOI
Foreign direct investment and spillovers of technology
Magnus Blomstrom,Ari Kokko +1 more
TLDR
It is argued that the positive effects of FDI postulated in much of the recent debate are not automatic, that the effects ofFDI 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 F DI.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 industryread more
Citations
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Journal ArticleDOI
Competitive advantages of the latecomer firm : a resource-based account of industrial catch-up strategies
TL;DR: In this article, the case of latecomer firms from the Asia-Pacific region breaking into knowledge-intensive industries such as semiconductors is used to illustrate the issues involved and the resource-targeting strategies utilized.
Journal ArticleDOI
Linking FDI motivation and host economy productivity effects: conceptual and empirical analysis
Nigel Driffield,James H. Love +1 more
TL;DR: This paper developed a taxonomy that relates foreign direct investment (FDI) motivation (technology-and cost-based) to its anticipated effects on host countries domestic productivity, and empirically examined the effects of FDI into the United Kingdom on domestic productivity.
Journal ArticleDOI
Foreign direct investment and economic growth in Vietnam
Sajid Anwar,Lan Phi Nguyen +1 more
TL;DR: In this article, the authors examined the link between foreign direct investment and economic growth in Vietnam by making use of a recently released panel dataset that covers 61 provinces of Vietnam from 1996 to 2005.
Journal ArticleDOI
The Creation and Diffusion of Innovation in Developing Countries : A Systematic Literature Review
TL;DR: In this article, the authors review the literature on the creation and diffusion of innovation in the private sectors (industry and services) in developing countries and find that the capacity for innovation is embedded in and constituted by dynamics between geographical, socio-economic, political and legal subsystems.
Journal ArticleDOI
MNEs vertical linkages: The experience of Vietnam after Malaysia
TL;DR: In this paper, the authors compare the activities of multinationals in both Malaysia and Vietnam using data provided by multinational subsidiaries, and suggest avenues for Vietnam to maximise beneficial linkages from MNEs.
References
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The mechanics of economic development
Abstract: This paper considers the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development. Three models are considered and compared to evidence: a model emphasizing physical capital accumulation and technological change, a model emphasizing human capital accumulation through schooling, and a model emphasizing specialized human capital accumulation through learning-by-doing.
Journal ArticleDOI
Increasing Returns and Long-Run Growth
TL;DR: In this paper, the authors present a fully specified model of long-run growth in which knowledge is assumed to be an input in production that has increasing marginal productivity, which is essentially a competitive equilibrium model with endogenous technological change.
Journal ArticleDOI
On the mechanics of economic development
TL;DR: In this article, the authors consider the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development, and compare three models and compared to evidence.
ReportDOI
Endogenous Technological Change
TL;DR: In this paper, the authors show that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Book
Innovation and growth in the global economy
Gene M. Grossman,Elhanan Helpman +1 more
TL;DR: Grossman and Helpman as discussed by the authors developed a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
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