 FDI in Côte d’Ivoire: Are local firms better off?Osaretin Olurotimi, Jeremy Foltz and Nouhoum Traore Journal of Development Economics, 2025, vol. 174, issue C Abstract: Developing countries often articulate the desire to attract more foreign direct investment (FDI) in their development and industrial policy to generate productivity spillovers. Does this policy achieve its aims? This work draws on unique firm panel data in Côte d’Ivoire and the latest techniques of estimating productivity to provide evidence about whether FDI benefits domestic firms’ productivity and export performance across all sectors. On average, we find no significant effects of FDI on productivity, but that masks significant heterogeneity. We see a significant impact of FDI on the productivity of small firms, firms older than five years, firms located outside Abidjan, and firms with above-median initial productivity. Horizontal FDI increases domestic firms’ intensive and extensive export margins, although we do not see the effects of downstream or upstream FDI on exports, on average. Our results imply that domestic firms gain export capabilities by observing foreign firms in the same industry. Keywords: Foreign direct investment; Spillovers; Domestic firms; Productivity; Exports; Africa (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:174:y:2025:i:c:s0304387824001901 DOI: 10.1016/j.jdeveco.2024.103441 Access Statistics for this article Journal of Development Economics is currently edited by M. R. Rosenzweig More articles in Journal of Development Economics from Elsevier |
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