Article ID Journal Published Year Pages File Type
5092321 Journal of Comparative Economics 2014 16 Pages PDF
Abstract

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, institutional environment (corruption, red tape, level of development), firm's distance to the technological frontier, and other firm- and country-specific characteristics.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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