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Horizontal and Vertical Technology Spillover of Foreign Direct Investment: An Evaluation across Indian Manufacturing Industries

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  • Behera, Smruti Ranjan Behera
  • Dua, Pami Dua
  • Goldar, Bishwanath Goldar
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Abstract

This paper explores the horizontal and vertical technology spillover effect of foreign direct investment (FDI) across Indian manufacturing industries. On the basis of Pedroni cointegration tests, we find that technology spillovers can be transmitted via all kinds of intermediate factors. We find that the horizontal foreign presence and inter-industry foreign presence have exclusive penetration effect to spur labor productivity and technology spillover across Indian industries. Furthermore, intermediate factors like technology import intensity, inter-industry technology import intensity, R&D intensity and inter-industry R&D intensity promote technology spillover and labor productivity across Indian manufacturing industries.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43293.

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Date of creation: 01 Oct 2012
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Handle: RePEc:pra:mprapa:43293

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Keywords: Foreign Direct Investment; Technology Spillover; Manufacturing; Panel Cointegration; Unit Root Tests;

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