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Foreign direct investment and total factor productivity in OECD countries: evidence from aggregate data

Author

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  • Argentino Pessoa

    (Faculdade de Economia, Universidade do Porto)

Abstract

Foreign direct investment (FDI) can be a source not just of capital, but also of new technology and intangibles such as organizational and managerial skills, and marketing networks. In this study, a panel data approach is used to study the effects of FDI on aggregate Total Factor Productivity in a sample of 16 OECD countries. We have implemented a statistical descriptive model that allows us to show that FDI has a positive impact on TFP, possibly because FDI is a channel through which technologies are transferred internationally.

Suggested Citation

  • Argentino Pessoa, 2005. "Foreign direct investment and total factor productivity in OECD countries: evidence from aggregate data," FEP Working Papers 188, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:188
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    File URL: http://www.fep.up.pt/investigacao/workingpapers/05.09.02_WP188_argentino.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Santos, Eleonora & Khan, Shahed, 2018. "Public Policies, Innovation and Convergence," EconStor Preprints 183508, ZBW - Leibniz Information Centre for Economics.
    3. Phillip Akanni Olomola & Tolulope Temilola Osinubi, 2018. "Determinants of Total Factor Productivity in Mexico, Indonesia, Nigeria, and Turkey (1980–2014)," Emerging Economy Studies, International Management Institute, vol. 4(2), pages 192-217, November.

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    More about this item

    Keywords

    Foreign direct investment; total factor productivity; royalties and license fees; spillovers;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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