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Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?

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TLDR
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.

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FDI, Human Capital and Income Convergence: Evidence for European Regions

TL;DR: In this paper, the authors examined income convergence in regional GDP per capita for a sample of 269 regions within the European Union (EU) between 2003 and 2010, using an endogenous broad capital model based on foreign direct investment induced agglomeration economies and human capital.
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Spatial Spillovers from Foreign Direct Investment: Evidence from the Yangtze River Delta in China

TL;DR: In this article, the spatial externality from foreign direct investment on domestic firms was examined, and it was shown that foreign firms generate a significantly positive spillover effect on the regional productivity of domestic firms in similar counties and industries.
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Foreign Direct Investment and the Survival of Domestic Private Firms in Viet Nam

TL;DR: In this article, foreign direct investment (FDI) may benefit local firms in the host country through various kinds of spillovers, but it may also raise competition and result in the crowding out of domestic firms.
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The Effects of Foreign Multinationals on Workers and Firms in the United States

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Absorptive capacity, foreign direct investment-linked spillovers and economic growth in Vietnam

TL;DR: In this paper, the authors examined the impact of foreign direct investment (FDI)-generated spillovers on manufacturing sector growth in Vietnam by making use of panel data on 22 manufacturing industries over the period 1995-2005.
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