When Does FDI Have Positive Spillovers? Evidence from 17 Transition Market Economies

Arbeitspapier

We use rich firm-level data and national input-output tables from 17 countries over the 2002-2005 period to test new and existing hypotheses about the impact of foreign direct investment (FDI) on the efficiency of domestic firms in the host country (i.e., spillovers). We document that backward linkages have a consistently positive effect on productivity of domestic firms while horizontal and forward linkages show no consistent effect. We also examine how the strength of spillovers varies by sector, FDI source, business environment (corruption, red tape, level of development), firm's distance to the technological frontier, education of workers, and other firm- and country-specific characteristics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7824

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; International Business Administration ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population
• Subject: FDI ; spillovers ; transition economies ; efficiency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gorodnichenko, Yuriy ; Svejnar, Jan ; Terrell, Katherine
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/90107
• Last update: 10.03.2025, 11:44 AM CET