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Home versus Host Country Effects of FDI: Searching for New Evidence of Productivity Spillovers

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  • Priit Vahter
  • Jaan Masso

Abstract

This paper investigates the effects of both inward and outward foreign direct investment (FDI) on productivity in manufacturing and services sectors. The main novelty is the analysis of the spillover effects of outward FDI that may occur outside the investing firms on the rest of the home country. Our results based on panel data from Estonia do not indicate much spillover effects of outward or inward FDI that are robust to different specifications of the estimated model, the spillover variable or the sector studied.

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Bibliographic Info

Article provided by Duncker & Humblot, Berlin in its journal Applied Economics Quarterly.

Volume (Year): 53 (2007)
Issue (Month): 2 ()
Pages: 165-196

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Handle: RePEc:aeq:aeqaeq:v53_y2007_i2_q2_p165-196

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Keywords: foreign direct investment; spillovers; home country effects; productivity;

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References

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Citations

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Cited by:
  1. Wen-Chung Hsu & Xingbo Gao & Jianhua Zhang & Hsin Mei Lin, 2011. "The effects of outward FDI on home-country productivity: Do location of investment and market orientation matter?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(2), pages 99-116, June.
  2. Priit Vahter, 2006. "Productivity in Estonian enterprises: the role of innovation and competition," Bank of Estonia Working Papers 2006-07, Bank of Estonia, revised 11 Dec 2006.
  3. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from Central and East European Transition Economies – A discrete choice analysis of location within the EU," MPRA Paper 51804, University Library of Munich, Germany, revised 12 Aug 2013.
  4. Herzer, Dierk, 2011. "The Long-Run Relationship between Outward FDI and Total Factor Productivity: Evidence for Developing Countries," Proceedings of the German Development Economics Conference, Berlin 2011 41, Verein für Socialpolitik, Research Committee Development Economics.
  5. Altomonte, C. & Pennings, H.P.G., 2009. "Domestic Plant Productivity and Incremental Spillovers from Foreign Direct Investment," ERIM Report Series Research in Management ERS-2009-012-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  6. Rõigas, Kärt, 2011. "Linkage between productivity and innovation in different service sectors," Discourses in Social Market Economy 2011-02, OrdnungsPolitisches Portal (OPO).
  7. Ivo Karilaid & Tõnn Talpsepp, 2010. "Can policy improve liquidity during a financial crisis?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 10(2), pages 5-26, December.
  8. Jan Hanousek & Evžen Kocenda & Mathilde Maurel, 2010. "Direct and indirect effects of FDI in emerging European markets : a survey and meta-analysis," Documents de travail du Centre d'Economie de la Sorbonne 10024, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  9. Priit Vahter, 2010. "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," William Davidson Institute Working Papers Series wp986, William Davidson Institute at the University of Michigan.
  10. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from the Central and Eastern European Transition Economies – A Discrete Choice Analysis of Location Choice within the European Union," MPRA Paper 51817, University Library of Munich, Germany, revised 04 Jun 2013.
  11. Jaan Masso & Tõnu Roolaht & Urmas Varblane, 2010. "Foreign Direct Investment And Innovation In Central And Eastern Europe: Evidence From Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 67, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  12. repec:hal:journl:halshs-00469544 is not listed on IDEAS
  13. Iwasaki, Ichiro & Tokunaga, Masahiro, 2013. "Spillover versus Ownership: A Meta-Analysis of Transition Literature," RRC Working Paper Series 42, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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