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Can Survey Evidence Shed Light on Spillovers from Foreign Direct Investment?

Can Survey Evidence Shed Light on Spillovers from Foreign Direct Investment? Although some economists remain skeptical of the existence of positive externalities associated with foreign direct investment (FDI), many countries spend large sums attracting foreign investors in the hope of benefiting from knowledge spillovers. Data collected through enterprise surveys conducted in the Czech Republic and Latvia suggest that the entry of multinationals affects domestic enterprises in the same industry or in upstream or downstream sectors through multiple channels. Some of these channels represent true knowledge spillovers while others have positive or negative effects on domestic producers in other ways. The relative magnitudes of these channels depend on host country conditions and the type of FDI inflows, which explains the seemingly inconsistent findings of the literature. The focus of the debate should shift from attempting to generalize about whether or not FDI leads to productivity spillovers to determining under what conditions it can do so. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The World Bank Research Observer Oxford University Press

Can Survey Evidence Shed Light on Spillovers from Foreign Direct Investment?

Javorcik, Beata S.
The World Bank Research Observer , Volume 23 (2) – Jun 4, 2008
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References (26)

Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Symposium on FDI
ISSN
0257-3032
eISSN
1564-6971
DOI
10.1093/wbro/lkn006
Publisher site
See Article on Publisher Site

Abstract

Although some economists remain skeptical of the existence of positive externalities associated with foreign direct investment (FDI), many countries spend large sums attracting foreign investors in the hope of benefiting from knowledge spillovers. Data collected through enterprise surveys conducted in the Czech Republic and Latvia suggest that the entry of multinationals affects domestic enterprises in the same industry or in upstream or downstream sectors through multiple channels. Some of these channels represent true knowledge spillovers while others have positive or negative effects on domestic producers in other ways. The relative magnitudes of these channels depend on host country conditions and the type of FDI inflows, which explains the seemingly inconsistent findings of the literature. The focus of the debate should shift from attempting to generalize about whether or not FDI leads to productivity spillovers to determining under what conditions it can do so.

Journal

The World Bank Research Observer – Oxford University Press

Published: Jun 4, 2008

Keywords: JEL codes F21 F23 O24 O33

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