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Foreign Direct Investment Spillovers and the Absorption Capabilities of Domestic Firms in the Argentine Manufacturing Sector (1992-2001)

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Author Info

  • Daniel Chudnovsky

    (Department of Economics, Universidad de San Andres & CENIT)

  • Andres Lopez

    (CENIT & Universidad de Buenos Aires)

  • Gaston Rossi

    (CENIT & Universidad de Buenos Aires)

Abstract

Argentina received large amounts of FDI inflows during the 90s. At the same time, deep structural reforms were introduced, forcing domestic firms to rapidly undertake restructuring processes in order to adapt to the new economic and institutional environment. This paper explores to what extent FDI helped or hindered those restructuring processes, analyzing whether positive (or negative) productivity spillovers arose from the increasing presence of TNCs affiliates. We found that TNCs affiliates have higher productivity levels than domestic firms and that the latter, on average, received neither positive nor negative horizontal and vertical (backward) spillovers from the growing presence of foreign firms in the local economy. However, we also found that domestic firms with high absorption capabilities reaped positive spillovers from TNCs presence while those with low absorption capabilities were more likely to receive negative spillovers. These findings suggest that those capabilities are key determinants of the possibilities of domestic firms to take advantage of incoming FDI flows into their countries.

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File URL: ftp://webacademicos.udesa.edu.ar/pub/econ/doc74.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by Universidad de San Andres, Departamento de Economia in its series Working Papers with number 74.

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Length: 35 pages
Date of creation: Jul 2004
Date of revision: Jul 2004
Handle: RePEc:sad:wpaper:74

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Keywords: FDI; spillovers; productivity;

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References

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Citations

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Cited by:
  1. Alessia LO TURCO, 2005. "Integration Agreements, FDI and Structural Reforms. An Analysis of the Determinants of European Investment in Latin America," Working Papers 229, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. Kolasa Marcin, 2008. "How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(1), pages 155-173.
  3. Wang, Jue & Liu, Xiaming & Li, Xiaoying, 2009. "A dual-role typology of multinational subsidiaries," International Business Review, Elsevier, vol. 18(6), pages 578-591, December.
  4. Claudia de Fuentes & Gabriela Dutrénit, 2013. "SMEs’ Absorptive Capacities and Large Firms’ Knowledge Spillovers: Micro Evidence from the Machining Industry in Mexico," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 1-30, April.
  5. Alessia LO TURCO, 2005. "The EU-Mercosur Association Process. An Analysis of Bilateral Trade," Working Papers 224, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Elisa Giuliani, 2010. "Multinational Corporations, Technology Spillovers and Human Rights's Impacts on Developing Countries," LEM Papers Series 2010/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. Daniel Chudnovsky & Andres Lopez & Gaston Rossi, 2008. "Foreign Direct Investment Spillovers and the Absorptive Capabilities of Domestic Firms in the Argentine Manufacturing Sector (1992-2001)," Journal of Development Studies, Taylor & Francis Journals, vol. 44(5), pages 645-677.
  8. Juliette Milgram-Baleix, 2009. "Do Spanish firms learn from firms located nearby?," Economic Working Papers at Centro de Estudios Andaluces E2009/09, Centro de Estudios Andaluces.
  9. Ciravegna, Luciano, 2011. "Technological learning in the Silicon Valleys of Latin America," MPRA Paper 36832, University Library of Munich, Germany.
  10. Elisa Giuliani & Chiara Macchi, 2013. "Multinational Corporations’ Economic And Human Rights Impacts On Developing Countries: A Review And Research Agenda," Discussion Papers 2013/158, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  11. repec:hal:wpaper:halshs-00586040 is not listed on IDEAS

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