Technology Spillover and Determinants of Foreign Direct Investment: An Analysis of Indian Manufacturing Industries
AbstractThis paper examines the spillover effect of foreign direct investment (FDI) and determinant of FDI across Indian manufacturing industries. The result, based on two-equation model that allows for the two-way link between labor productivity of locally owned industries and foreign presence provide evidence that foreign presence brings new channels of knowledge and technology spillover to domestic industrial firms. We find that intermediate factors like R&D intensity and technology import intensity can impact positively the productivity of domestic firms. Furthermore, we find that bigger market size and highly productive domestic sectors are likely to attract more foreign capital into Indian industries.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42178.
Date of creation: 01 Aug 2012
Date of revision:
Foreign Direct Investment; Technology Spillover; Manufacturing; Panel Cointegration; Unit Root Tests;
Find related papers by JEL classification:
- F30 - International Economics - - International Finance - - - General
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-06 (All new papers)
- NEP-CSE-2012-12-06 (Economics of Strategic Management)
- NEP-EFF-2012-12-06 (Efficiency & Productivity)
- NEP-INO-2012-12-06 (Innovation)
- NEP-INT-2012-12-06 (International Trade)
- NEP-SBM-2012-12-06 (Small Business Management)
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