Which Foreigners Are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI
AbstractThe principal argument for subsidizing foreign investment is the assumed spillover of technology to local firms. Yet researchers report mixed results on spillovers. To examine the phenomenon in a systematic way, we collected 3,626 estimates from 57 empirical studies on between-sector spillovers and reviewed the literature quantitatively. Our results indicate that model misspecifications reduce the reported estimates, but that journals select rela¬tively large estimates for publication. The underlying spillover to suppliers is positive and economically significant, whereas the spillover to buyers is insignificant. Greater spillovers are generated by investors that come from distant countries and that have only slight tech¬nological advantages over local firms. In addition, greater spillovers are received by countries that have underdeveloped financial systems and that are open to international trade.
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Bibliographic InfoPaper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2010/16.
Length: 34 pages
Date of creation: Aug 2010
Date of revision: Aug 2010
Foreign direct investment; Productivity; Spillovers; Meta-analysis; Publication selection bias;
Other versions of this item:
- Tomas Havranek & Zuzana Irsova, 2010. "Which Foreigners Are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI," Working Papers 2010/03, Czech National Bank, Research Department.
- Tomas Havranek & Zuzana Irsova, 2010. "Which Foreigners are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI," William Davidson Institute Working Papers Series wp996, William Davidson Institute at the University of Michigan.
- C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-14 (All new papers)
- NEP-EFF-2010-08-14 (Efficiency & Productivity)
- NEP-INT-2010-08-14 (International Trade)
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