FDI Spillovers and the Timing of Foreign Entry
AbstractThis study analyzes the dynamic effect of FDI on local firmsâ€™ productivity by relaxing the standard implicit assumption that technological spillovers are immediate and permanent. We find that the entry of majority foreign owned firms has a short run negative effect on the productivity of local competitors, which is more than offset by a longer run positive effect. The entry of minority foreign owned firms has an immediate, though short-lived, positive effect on local suppliers through backward linkages. The entry of majority foreign owned firms also improves the productivity of local suppliers, but the effect materializes later and lasts longer.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 26710.
Date of creation: 2010
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FDI; spillovers; dynamics; timing;
Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-21 (All new papers)
- NEP-INT-2010-08-21 (International Trade)
- NEP-OPM-2010-08-21 (Open Economy Macroeconomic)
- NEP-TID-2010-08-21 (Technology & Industrial Dynamics)
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