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How to Stir Up FDI Spillovers: Evidence from a Large Meta-Analysis

Tomas Havranek () and Zuzana Irsova ()

No wp1021, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The voluminous empirical research on horizontal productivity spillovers from foreign investors to domestic firms in transition and developing countries has yielded mixed results. In this paper, we collect 1,205 estimates of horizontal spillovers from the literature and examine which factors in uence spillover magnitude. To identify the most important determinants of spillovers among 43 collected variables, we employ Bayesian model averaging. Our results suggest that horizontal spillovers are on average zero, but that their sign and magnitude depend systematically on the characteristics of the domestic economy and foreign investors. The most important determinants are the technology gap between domestic and foreign firms and the ownership structure in investment projects. Foreign investors who form joint ventures with domestic firms and who come from countries with a modest technology edge create the largest benefits for the domestic economy.

Keywords: Bayesian model averaging; Foreign direct investment; Productivity spillovers; Determinants; Meta-analysis (search for similar items in EconPapers)
JEL-codes: C83 F23 O12 (search for similar items in EconPapers)
Pages: pages
Date: 2011-11-01
New Economics Papers: this item is included in nep-cse and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

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http://deepblue.lib.umich.edu/bitstream/2027.42/133037/1/wp1021.pdf

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