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Technology transfer through vertical linkages: The case of the Spanish manufacturing industry

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Abstract

Whether or not foreign direct investment helps to upgrade the technological capacities of firms in host countries is an important question for policy makers. Even more important is the question of what are the most effective channels of technology transfer. The econometric analysis presented here is based on a firm level database from Spain for the period 1990-2000. We associate spillovers with the effect of horizontal and vertical FDI on total factor productivity of local firms. We find that technology spillovers are limited to the case of vertical linkages. However these spillovers are affected by the technology gap between domestic firms and foreign affiliates as well as by the characteristics of foreign affiliates. Linkages with exportoriented affiliates and fully owned ones seem to have a better influence on the productivity of domestic firms.

Suggested Citation

  • Liza Jabbour & Jean Louis Mucchielli, 2007. "Technology transfer through vertical linkages: The case of the Spanish manufacturing industry," Journal of Applied Economics, Universidad del CEMA, vol. 10, pages 115-136, May.
    • Handle: RePEc:cem:jaecon:v:10:y:2007:n:1:p:115-136
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    More about this item

    Keywords

    technology spillovers; vertical linkages; foreign direct investment;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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