The determinants of host country spillovers from foreign direct investment: review and synthesis of the literature
AbstractThe existence of spillover efficiency benefits to host country economies from inward foreign direct investment(FDI) are well documented in the literature, particularly for economically developed host economies. The determinantsof the size and scope of the spillover benefits have also been studied, but they are not as clearly and consistently documented as the exixtence of the relevant externalities. Yet, a good understanding of the determinants of the nature and magnitude of of FDI efficiency spillovers is of crucial importance to policymakers. the primary purpose of this paper is to review and synthesize the available literature foucusing on the determinants of efficiency spillovers from inward FDI. In order to do so, we also outline a theoretical framework for understanding the underlying "supply'"and "demand" forces determining the scope and magnitude of FDI spillovers to host economies. The findings suggest that the competitiveness of host country markets, proxied e.g. by openness to imports, and the technical capability of lopcal firms are among the most important deteminants of spiloover benefits. Both of these characteristics can be influenced by the host country policy. However, it is difficult to provide unequivoval policy advice othe the basis of this findings, since some of the policies that maximize the potential spilloversfrom a given "pool" of appropriable technology (such as technology transfer requirements or active competition policies) may actually reduce the attractiveness of the host country to some foreign investors.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 502.
Length: 31 pages
Date of creation: 27 Oct 1999
Date of revision:
Publication status: Published in Inward Investment, Technological Change and Growth, Pain, Nigel (eds.), 2001, pages 34-65, Palgrave in association with National Institute of Economic and Social Research.
Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
More information through EDIRC
foreign direct investment; multinational corporations; spillovers;
Other versions of this item:
- Blomström, Magnus & Globerman, Steven & Kokko, Ari, 1999. "The Determinants of Host Country Spillovers from Foreign Direct Investment: Review and Synthesis of the Literature," Working Paper Series in Economics and Finance 339, Stockholm School of Economics.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Galina Hale & Cheryl Long, 2007.
"Are there productivity spillovers from foreign direct investment in China?,"
Working Paper Series
2006-13, Federal Reserve Bank of San Francisco.
- Galina Hale & Cheryl Long, 2011. "Are There Productivity Spillovers From Foreign Direct Investment In China?," Pacific Economic Review, Wiley Blackwell, vol. 16(2), pages 135-153, 05.
- Dieter M. Urban, 2010.
"FDI, Technology Spillovers, and Wages,"
Review of International Economics,
Wiley Blackwell, vol. 18(3), pages 443-453, 08.
- Assaf Razin, 2003.
"FDI Contribution to Capital Flows and Investment in Capacity,"
052003, Hong Kong Institute for Monetary Research.
- Assaf Razin, 2002. "FDI Contribution to Capital Flows and Investment in Capacity," NBER Working Papers 9204, National Bureau of Economic Research, Inc.
- Resmini, Laura, 2006. "Theoretical and Methodological Study on Comparative Advantages in Dynamic Growth Regions, Convergence and Inequalities Patterns," Papers DYNREG03, Economic and Social Research Institute (ESRI).
- Lutz, Stefan H. & Talavera, Oleksandr, 2003.
"Do Ukrainian firms benefit from FDI,"
ZEI Working Papers
B 04-2003, ZEI - Center for European Integration Studies, University of Bonn.
- Jordaan, Jacob A., 2005. "Determinants of FDI-induced externalities: New empirical evidence for Mexican manufacturing industries," World Development, Elsevier, vol. 33(12), pages 2103-2118, December.
- Hemmer, Hans-Rimbert & Krüger, Ralf & Seith, Jennifer, 2006. "Ausländische Direktinvestitionen: Flankierende Maßnahmen des Staates," Discussion Papers in Development Economics 36, Justus Liebig University Giessen, Institute for Development Economics.
- Marcella Nicolini & Laura Resmini, 2006.
"The Impact of Mnes on Domestic Firms in CEECS: A Micro-Econometric Approach,"
ERSA conference papers
ersa06p411, European Regional Science Association.
- Resmini, Laura & Nicolini, Marcella, 2007. "Productivity Spillovers from Foreign Investment: The Role of Neglected Conditionalities," Papers DYNREG11, Economic and Social Research Institute (ESRI).
- Filippo Reganati & Edgardo Sica, 2005. "Do domestic firms benefit from the presence of MNEs? The case of the Italian manufacturing sector," Quaderni DSEMS 23-2005, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
- Zhao, Wei & Liu, Ling & Zhao, Ting, 2010. "The contribution of outward direct investment to productivity changes within China, 1991-2007," Journal of International Management, Elsevier, vol. 16(2), pages 121-130, June.
- Hallin, Christina & Holmström Lind, Christine, 2012. "Revisiting the external impact of MNCs: An empirical study of the mechanisms behind knowledge spillovers from MNC subsidiaries," International Business Review, Elsevier, vol. 21(2), pages 167-179.
- Oscar Alfranca, 2005. "Private R&D and Spillovers in European Agriculture," International Advances in Economic Research, Springer, vol. 11(2), pages 201-213, May.
- Galina Hale & Cheryl Long, 2006. "What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China," Working Papers 934, Economic Growth Center, Yale University.
- Ksenia Yudaeva & Kozlov Konstantin & Natalia Melentieva & Natalia Ponomareva, 2000. "Does Foreign Ownership Matter? Russian Experience," Working Papers w0005, Center for Economic and Financial Research (CEFIR).
- Edna Maeyen Solomon, 2011. "Foreign Direct Investment, Host Country Factors and Economic Growth," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 41-70, May.
- Takii, Sadayuki, 2005. "Productivity spillovers and characteristics of foreign multinational plants in Indonesian manufacturing 1990-1995," Journal of Development Economics, Elsevier, vol. 76(2), pages 521-542, April.
- Takii, Sadayuki, 2004. "Productivity Differentials Between Local and Foreign Plants in Indonesian Manufacturing, 1995," World Development, Elsevier, vol. 32(11), pages 1957-1969, November.
- Giovanni Peri, 2004.
"Catching-Up to Foreign Technology? Evidence on the "Veblen-Gerschenkron" Effect of Foreign Investments,"
NBER Working Papers
10893, National Bureau of Economic Research, Inc.
- Peri, Giovanni & Urban, Dieter, 2006. "Catching-up to foreign technology? Evidence on the "Veblen-Gerschenkron" effect of foreign investments," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 72-98, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).
If references are entirely missing, you can add them using this form.