Which Foreigners Are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI

Tomas Havranek and Zuzana Irsova

No 2010/16, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: The principal argument for subsidizing foreign investment is the assumed spillover of technology to local firms. Yet researchers report mixed results on spillovers. To examine the phenomenon in a systematic way, we collected 3,626 estimates from 57 empirical studies on between-sector spillovers and reviewed the literature quantitatively. Our results indicate that model misspecifications reduce the reported estimates, but that journals select rela¬tively large estimates for publication. The underlying spillover to suppliers is positive and economically significant, whereas the spillover to buyers is insignificant. Greater spillovers are generated by investors that come from distant countries and that have only slight tech¬nological advantages over local firms. In addition, greater spillovers are received by countries that have underdeveloped financial systems and that are open to international trade.

Keywords: Foreign direct investment; Productivity; Spillovers; Meta-analysis; Publication selection bias (search for similar items in EconPapers)
JEL-codes: C83 F23 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-08, Revised 2010-08
New Economics Papers: this item is included in nep-eff and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Working Paper: Which Foreigners Are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI (2010)
Working Paper: Which Foreigners are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI (2010)
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