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

Jan Svejnar, Katherine Terrell and Yuriy Gorodnichenko

No 9807, CEPR Discussion Papers from Centre for Economic Policy Research

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, 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.

Keywords: Efficiency; Fdi; Spillovers; Transition economies (search for similar items in EconPapers)
JEL-codes: F23 M16 O16 P23 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-eff, nep-int and nep-tra
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Citations: View citations in EconPapers (128)

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Journal Article: When does FDI have positive spillovers? Evidence from 17 transition market economies (2014)
Working Paper: When Does FDI Have Positive Spillovers? Evidence from 17 Transition Market Economies (2013)
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