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Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?
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In this paper, a comprehensive evaluation of the empirical evidence on productivity, wages and exports spillovers in developing, developed and transitional economies is presented. But, although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is hard to find.Abstract:
Many governments offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits. This paper begins by reviewing possible sources of spillovers. It then provides a comprehensive evaluation of the empirical evidence on productivity, wages and exports spillovers in developing, developed and transitional economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is hard to find. The reasons for this are explored and the paper concludes with a review of policy aspects.read more
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Technology Spillovers from Foreign Direct Investment (FDI): an Exploration of the Active Role of MNC Subsidiaries in the Case of Argentina in the 1990s
Anabel Marin,Martin Bell +1 more
TL;DR: In this paper, the authors explore empirically the effects of these activities on technology spillovers from FDI using data for industrial firms in Argentina over the period 1992-1996, and find that significant results can be obtained incorporating subsidiaries' own technological activities as an explanatory variable of the spillover process.
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Foreign Direct Investment Spillovers and the Absorptive Capabilities of Domestic Firms in the Argentine Manufacturing Sector (1992–2001)
TL;DR: In this article, the authors analyzed whether positive or negative productivity spillovers arose from the increasing presence of transnational corporations (TNCs) affiliates in Argentina and found that TNCs affiliates had higher productivity levels than domestic firms and that the latter, on average, received neither positive nor negative horizontal spillovers from the growing presence of foreign firms in the local economy.
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Technology Transfer from Acquisition FDI and the Absorptive Capacity of Domestic Firms: An Empirical Investigation
TL;DR: In this paper, the role of absorptive capacity in technology transfer from acquisition FDI in UK manufacturing was investigated and it was found that the rate of productivity change following a foreign take-over is higher the higher the pre-acquisition productivity level of the acquired firm.
References
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A sensitivity analysis of cross-country growth regressions
Robert A. Levine,David Renelt +1 more
TL;DR: In this article, the authors study whether the conclusions from existing studies are robust or fragile when small changes in the list of independent variables occur, and they find that although "policy"appears to be importantly related to growth, there is no strong independent relationship between growth and almost every existing policy indicator.
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A sensitivity analysis of cross-country growth regressions
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TL;DR: The authors examined whether the conclusions from existing studies are robust or fragile to small changes in the conditioning information set and found a positive, robust correlation between growth and the share of investment in GDP and between investment share and the ratio of international trade to GDP.
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How does foreign direct investment affect economic growth
TL;DR: In this article, the effect of FDI on economic growth in a cross-country regression framework was investigated. And they found that FDI contributes to economic growth only when a sufficient absorptive capability of the advanced technologies is available in the host economy.
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Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages
TL;DR: In this paper, the authors studied the impact of trade and foreign direct investment on the productivity of domestic firms in the manufacturing sector in the country of Lithuania and found that a 10 percent increase in the foreign presence in downstream sectors is associated with a 0.38 percent rise in output of each domestic firm in the supplying industry.
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