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

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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Firm heterogeneity, exporting and foreign direct investment*

TL;DR: A rapidly expanding literature on firm heterogeneity and firm level globalisation strategies has developed over the last decade as discussed by the authors, with new insights on why some firms export and others do not, why some fail to survive in export markets and some choose to produce overseas rather than export.
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Determinant Factors of FDI Spillovers - What Do We Really Know?

TL;DR: In this article, the authors survey the arguments that support these factors and the empirical evidence already produced, and the results show contrary effects or, in some cases, are still insufficient to draw reliable conclusions.
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Capital Account Liberalization: Theory, Evidence, and Speculation

TL;DR: The authors argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature, and explain why it is that most studies do not really address the theory they set out to test.
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Absorptive capacity and productivity spillovers From FDI: a threshold regression analysis

TL;DR: In this article, the effect of foreign direct investment on productivity growth is investigated in manufacturing sectors where technology-exploiting multinationals are prevalent, and the results point to the presence of nonlinear threshold effects: the productivity benefit from FDI increases with absorptive capacity until some threshold level beyond which it becomes less pronounced.
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Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries

TL;DR: In this paper, the impact of different channels for international technology spillover on the innovation performance of Chinese high-tech industries, using panel data analysis, was investigated empirically, showing that learning-by-exporting (and importing) promotes innovation in Chinese indigenous firms.
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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 focus on the issue of FDI spillovers through backward linkages and go beyond existing studies by shedding some light on factors driving this phenomenon, which is 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.
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Productivity Impacts and Spillovers from Foreign Ownership in the United Kingdom

TL;DR: In this paper, the authors measured the indirect impact of FDI on the total factor productivity of domestic plants in a number of UK manufacturing industries, using a standard production function-based approach.
Posted Content

The diffusion of externalities from foreign direct investment: theory ahead of measurement

TL;DR: In this paper, a structural estimation framework is developed to assess whether inward foreign direct investment (FDI) generates technological externalities, and the econometric model is implemented in an empirical investigation with data from Colombia's Manufacturing Census.
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Productivity spillovers from foreign direct investment in Poland

TL;DR: In this article, the effect of foreign direct investment on the scope of productivity growth of locally-owned firms is examined using firm level data from the Polish manufacturing sector, and the results suggest that a higher foreign presence within an industry affects local firms negatively.
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