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Foreign direct investment and technical progress in Spanish manufacturing

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  • J. Rosell-Martinez
  • P. Sanchez-Sellero

Abstract

This article analyses the effects of Foreign Direct Investment (FDI) on technical progress in Spanish manufacturing. Particularly, we study how FDI's contributions vary depending on the economic structure of the industry. The results show that most FDI goes to capital-intensive sectors, especially when those sectors are also Research and Development (R&D)-intensive. Our estimates of the Solow residual show that the positive effect of contemporaneous and lagged FDI on manufacturing productivity is only attributable to capital and R&D intensive industries in what seems to be related to a dynamic capabilities explanation or to complementarities with R&D expenditures.

Suggested Citation

  • J. Rosell-Martinez & P. Sanchez-Sellero, 2012. "Foreign direct investment and technical progress in Spanish manufacturing," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2473-2489, July.
    • Handle: RePEc:taf:applec:44:y:2012:i:19:p:2473-2489
    DOI: 10.1080/00036846.2011.564155
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    References listed on IDEAS

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    1. Douglas Todd, 1988. "Total factor productivity growth and the productivity slowdown in the west german industrial sector, 1970-1981," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 124(1), pages 108-126, March.
    2. Baldwin, John R. & Raffiquzzaman, Mohammed, 1994. "Structural Change in the Canadian Manufacturing Sector (1970-90)," Analytical Studies Branch Research Paper Series 1994061e, Statistics Canada, Analytical Studies Branch.
    3. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    4. Florence Hubert & Nigel Pain, 2000. "Inward Investment and Technical Progress in the UK Manufacturing Sector," OECD Economics Department Working Papers 268, OECD Publishing.
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    Cited by:

    1. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    2. Sánchez-Sellero, Pedro & Rosell-Martínez, Jorge & García-Vázquez, José Manuel, 2014. "Absorptive capacity from foreign direct investment in Spanish manufacturing firms," International Business Review, Elsevier, vol. 23(2), pages 429-439.
    3. Shimaa Elkomy & Hilary Ingham & Robert Read, 2021. "The Impact of Foreign Technology and Embodied R&D on Productivity in Internationally Oriented and High-Technology Industries in Egypt, 2006–2009," Journal of Industry, Competition and Trade, Springer, vol. 21(2), pages 171-192, June.
    4. Shimaa Elkomy & Hilary Ingham & Robert Read, 2020. "The Impact of Foreign Technology & Embodied R&D On Productivity in Internationally-Oriented & High-Technology Industries in Egypt, 2006-2009," Working Papers 293574925, Lancaster University Management School, Economics Department.
    5. Pedro Sánchez-Sellero & Jorge Rosell-Martínez & José Manuel García-Vázquez, 2014. "Spillovers from Foreign Direct Investment in Spanish Manufacturing Firms," Review of International Economics, Wiley Blackwell, vol. 22(2), pages 342-351, May.

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