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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
Citations
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Absorptive capacity and productivity spillovers From FDI: a threshold regression analysis
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References
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Foreign investment and productivity growth in Czech enterprises
Simeon Djankov,Bernard Hoekman +1 more
TL;DR: This paper used firm-level data for the Czech Republic to show that during 1992-96, foreign investment had the predicted positive impact on total factor productivity growth of recipient firms and that the magnitude of the spillover becomes much smaller and loses significance with foreign direct investment alone.
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Technology Transfer and Spillovers? Does Local Participation with Multinationals Matter?
Magnus Blomstrom,Fredrik Sjöholm +1 more
TL;DR: In this paper, the effects on technology transfer and spillovers deriving from ownership sharing of foreign multinational affiliates were examined using unpublished Indonesian micro data, and the results showed that foreign establishments have comparable high levels of labor productivity and that domestic establishments benefit from spillovers.
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Agglomeration in the Global Economy: A Survey of the ‘New Economic Geography’
TL;DR: In this article, a review of recent contributions reveals common conclusions about the effects of integration on location: integration weakens the incentives for self-sufficiency and for intermediate values of trade costs pecuniary externalities induce firms and workers to cluster together.
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Foreign Direct Investment and `Spillover' Efficiency Benefits in Canadian Manufacturing Industries.
TL;DR: In this paper, the existence of indirect economic benefits of foreign direct investment in Canada is investigated for a sample of Canadian manufacturing industries, and various measures of foreign ownership are included among the independent variables in the estimating equations.
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Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States
TL;DR: The authors explored the relationship between wages and foreign investment in Mexico, Venezuela, and the United States Despite very different economic conditions and levels of development, they find one fact that is robust across all three countries: higher levels of foreign investment are associated with higher wages.
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