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Heterogeneous FDI in Transition Economies – A Novel Approach to Assess the Developmental Impact of Backward Linkages

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  • Giroud, Axèle
  • Jindra, Björn
  • Marek, Philipp

Abstract

Traditional models of technology transfer via FDI rely upon technology gap and absorptive capacity arguments to explain host economies’ potential to benefit from technological spillovers. This paper emphasizes foreign affiliates’ technological heterogeneity. We apply a novel approach differentiating extent and intensity of backward linkages between foreign affiliates and local suppliers. We use survey data on 809 foreign affiliates in five transition economies. Our evidence shows that foreign affiliates’ technological capability, embeddedness and autonomy are positively related to knowledge transfer via backward linkages. In contrast to what is widely assumed, we find a non-linear relationship between extent of local sourcing and knowledge transfer to domestic suppliers.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 11 ()
Pages: 2206-2220

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:11:p:2206-2220

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: FDI; multinational enterprises; backward linkages; spillovers; transition economies; Central and Eastern Europe;

References

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Citations

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Cited by:
  1. Andrea Gauselmann, 2013. "R&D Co-operation in European Post-transition Economies," IWH Discussion Papers 4, Halle Institute for Economic Research.
  2. Carol Newman & John Rand & Theodore Talbot & Finn Tarp, 2014. "Technology transfers, foreign investment and productivity spillovers: evidence from Vietnam," The Institute for International Integration Studies Discussion Paper Series iiisdp440, IIIS.
  3. Merlevede, Bruno & Schoors, Koen & Spatareanu , Mariana, 2013. "FDI spillovers and time since foreign entry," BOFIT Discussion Papers 27/2013, Bank of Finland, Institute for Economies in Transition.
  4. Elisa Giuliani & Chiara Macchi, 2013. "Multinational Corporations’ Economic And Human Rights Impacts On Developing Countries: A Review And Research Agenda," Discussion Papers 2013/158, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  5. Winkler, Deborah, 2013. "Potential and actual FDI spillovers in global value chains : the role of foreign investor characteristics, absorptive capacity and transmission channels," Policy Research Working Paper Series 6424, The World Bank.

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