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Do FDI Inflows Have Positive Spillover Effects? The Case of the Philippine Manufacturing Industry

Rafaelita Aldaba and Fernando Aldaba ()

Philippine Journal of Development from Philippine Institute for Development Studies

Abstract: The experience of the Philippines shows that foreign direct investment (FDI) spillover effects are not automatically generated. Opening up the economy to FDI has contributed to the country`s exports of high-technology products and overall economic growth. However, the spillover effects of FDI to domestic firms have remained limited due to the domestic firms` weak competitiveness and inability to absorb the technology or knowledge being transferred. The government needs to adopt a more comprehensive approach that would combine industrial policy to improve and develop domestic parts and supplier firms with measures to create an environment conducive to the creation and expansion of FDI-related spillovers as well as increase participation in higher segments of industry value chain.

Keywords: Philippines; FDI spillover effects; Philippine manufacturing industry (search for similar items in EconPapers)
Pages: 13
Date: 2013
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