New and Improved: Does FDI Boost Production Complexity in Host Countries?

Beata Javorcik, Alessia Lo Turco and Daniela Maggioni

No 11942, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the relationship between the presence of foreign affiliates and product upgrading by Turkish manufacturing firms. The analysis suggests that Turkish firms in sectors and regions more likely to supply foreign affiliates tend to introduce more complex products, where complexity is captured using a measure developed by Hausmann and Hidalgo (2009). This finding is robust to controlling for omitted variables, sample selection and potential simultaneity bias. It is also in line with the view that inflows of foreign direct investment stimulate upgrading of indigenous production capabilities in host countries.

Keywords: Product innovation; Production upgrading; Fdi; Backward linkages; Turkey (search for similar items in EconPapers)
JEL-codes: D22 F23 L20 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-eff, nep-int and nep-tid
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Citations: View citations in EconPapers (16)

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Journal Article: New and Improved: Does FDI Boost Production Complexity in Host Countries? (2018)
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