IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis

  • Tomas Havranek
  • Zuzana Irsova

The voluminous empirical research on horizontal productivity spillovers from foreign investors to domestic firms has yielded mixed results. In this paper, we collect 1,205 estimates of horizontal spillovers from the literature and examine which factors influence spillover magnitude. To identify the most important determinants of spillovers among 43 collected variables, we employ Bayesian model averaging. Our results suggest that horizontal spillovers are on average zero, but that their sign and magnitude depend systematically on the characteristics of the domestic economy and foreign investors. The most important determinants are the technology gap between domestic and foreign firms and the ownership structure in investment projects. Foreign investors who form joint ventures with domestic firms and who come from countries with a modest technology edge create the largest benefits for the domestic economy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Czech National Bank, Research Department in its series Working Papers with number 2011/07.

in new window

Date of creation: Oct 2011
Date of revision:
Handle: RePEc:cnb:wpaper:2011/07
Contact details of provider: Postal: Na Prikope 28, 115 03 Prague 1
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Girma, Sourafel & Görg, Holger & Pisu, Mauro, 2007. "Exporting, Linkages and Productivity Spillovers from Foreign Direct Investment," CEPR Discussion Papers 6383, C.E.P.R. Discussion Papers.
  2. Havranek, Tomas, 2009. "Rose Effect and the Euro: Is the Magic Gone?," MPRA Paper 18479, University Library of Munich, Germany, revised 07 Nov 2009.
  3. Beata S. Javorcik & Çaglar Özden & Mariana Spatareanu & Cristina Neagu, 2006. "Migrant Networks and Foreign Direct Investment," Working Papers Rutgers University, Newark 2006-003, Department of Economics, Rutgers University, Newark.
  4. Filip Abraham & Jozef Konings & Veerle Slootmaekers, 2010. "FDI spillovers in the Chinese manufacturing sector," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 143-182, 01.
  5. repec:rwi:repape:0086 is not listed on IDEAS
  6. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
  7. Martin Feldkircher & Stefan Zeugner, 2009. "Benchmark Priors Revisited: On Adaptive Shrinkage and the Supermodel Effect in Bayesian Model Averaging," IMF Working Papers 09/202, International Monetary Fund.
  8. Javorcik, Beata Smarzynska & Spatareanu, Mariana, 2008. "To share or not to share: Does local participation matter for spillovers from foreign direct investment?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 194-217, February.
  9. Xiaming Liu & Chengang Wang & Yingqi Wei, 2009. "Do local manufacturing firms benefit from transactional linkages with multinational enterprises in China?," Journal of International Business Studies, Palgrave Macmillan, vol. 40(7), pages 1113-1130, September.
  10. Marcin Kolasa, 2007. "How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition," National Bank of Poland Working Papers 42, National Bank of Poland, Economic Institute.
  11. Klaus Moeltner & Richard Woodward, 2009. "Meta-Functional Benefit Transfer for Wetland Valuation: Making the Most of Small Samples," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 89-108, January.
  12. Taymaz, Erol & Yilmaz, Kamil, 2008. "Foreign Direct Investment and Productivity Spillovers: Identifying Linkages through Product-based Measures," MPRA Paper 66243, University Library of Munich, Germany, revised 2009.
  13. Ksenia Yudaeva & Kozlov Konstantin & Natalia Melentieva & Natalia Ponomareva, 2000. "Does Foreign Ownership Matter? Russian Experience," Working Papers w0005, Center for Economic and Financial Research (CEFIR).
  14. Jan Hagemejer & Marcin Kolasa, 2008. "Internationalization and economic performance of enterprises: evidence from firm-level data," National Bank of Poland Working Papers 51, National Bank of Poland, Economic Institute.
  15. Adam Blake & Ziliang Deng & Rod Falvey, 2009. "How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(2), pages 183-197.
  16. Sebnem Kalemli-Ozcan & Laura Alfaro & Selin Sayek & Areendam Chanda, 2002. "FDI and Economic Growth: The Role of Local Financial Markets," Macroeconomics 0212007, EconWPA.
  17. K. Schoors & B. Van Der Tol, 2002. "Foreign direct investment spillovers within and between sectors: Evidence from Hungarian data," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 02/157, Ghent University, Faculty of Economics and Business Administration.
  18. Katerina Smídková & Jan Babecky & Ales Bulir, 2010. "Sustainable Real Exchange Rates in the New Eu Member States: What Did the Great Recession Change?," IMF Working Papers 10/198, International Monetary Fund.
  19. Adam Gersl & Ieva Rubene & Tina Zumer, 2007. "Foreign Direct Investment and Productivity Spillovers: Updated Evidence from Central and Eastern Europe," Working Papers 2007/8, Czech National Bank, Research Department.
  20. Jon Nelson & Peter Kennedy, 2009. "The Use (and Abuse) of Meta-Analysis in Environmental and Natural Resource Economics: An Assessment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(3), pages 345-377, March.
  21. Gorodnichenko, Yuriy & Svejnar, Jan & Terrell, Katherine, 2007. "When Does FDI Have Positive Spillovers? Evidence from 17 Emerging Market Economies," CEPR Discussion Papers 6546, C.E.P.R. Discussion Papers.
  22. Roger Smeets & Albert de Vaal, 2011. "Knowledge diffusion from FDI and Intellectual Property Rights," CPB Discussion Paper 168, CPB Netherlands Bureau for Economic Policy Analysis.
  23. Jacob A Jordaan, 2008. "Regional foreign participation and externalities: new empirical evidence from Mexican regions," Environment and Planning A, Pion Ltd, London, vol. 40(12), pages 2948-2969, December.
  24. Nguyen, Anh Ngoc & Nguyen, Thang & Le, Dang Trung & Pham, Quang Ngoc & Nguyen, Dinh Chuc & Nguyen, Duc Nhat, 2008. "Foreign direct investment in Vietnam: Is there any evidence of technological spillover effects," MPRA Paper 7273, University Library of Munich, Germany.
  25. Nuno Crespo & Isabel Proença & Maria Paula Fontoura, 2008. "FDI Spillovers at Regional Level: Evidence from Portugal," Working Papers Series 1 ercwp0508, ISCTE-IUL, Business Research Unit (BRU-IUL).
  26. Babecký, Jan & Campos, Nauro F., 2011. "Does reform work? An econometric survey of the reform-growth puzzle," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 140-158, June.
  27. Matthias Arnold, Jens & Javorcik, Beata S., 2009. "Gifted kids or pushy parents? Foreign direct investment and plant productivity in Indonesia," Journal of International Economics, Elsevier, vol. 79(1), pages 42-53, September.
  28. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
  29. Blyde, Juan & Kugler, Maurice & Stein, Ernesto, 2004. "Exporting vs. outsourcing by MNC subsidiaries: which determines FDI spillovers?," Discussion Paper Series In Economics And Econometrics 0411, Economics Division, School of Social Sciences, University of Southampton.
  30. Blalock, Garrick & Gertler, Paul J., 2009. "How firm capabilities affect who benefits from foreign technology," Journal of Development Economics, Elsevier, vol. 90(2), pages 192-199, November.
  31. Joze P. Damijan & Mark Knell & Boris Majcen & Matija Rojec, 2003. "Technology Transfer through FDI in Top-10 Transition Countries: How Important are Direct Effects, Horizontal and Vertical Spillovers?," William Davidson Institute Working Papers Series 549, William Davidson Institute at the University of Michigan.
  32. Javorcik, Beata S. & Spatareanu, Mariana, 2011. "Does it matter where you come from? Vertical spillovers from foreign direct investment and the origin of investors," Journal of Development Economics, Elsevier, vol. 96(1), pages 126-138, September.
  33. Tomáš Havránek, 2009. "Rose Effect and the Euro: The Magic is Gone," Working Papers IES 2009/20, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2009.
  34. Subash Sasidharan & A. Ramanathan, 2007. "Foreign Direct Investment and spillovers: evidence from Indian manufacturing," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 1(1), pages 5-22.
  35. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
  36. Liu, Zhiqiang, 2008. "Foreign direct investment and technology spillovers: Theory and evidence," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 176-193, February.
  37. is not listed on IDEAS
  38. Theodore H. Moran & Edward M. Graham & Magnus Blomstrom, 2005. "Does Foreign Direct Investment Promote Development?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3810.
  39. Tomas Havranek & Zuzana Irsova, 2010. "Which Foreigners are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI," William Davidson Institute Working Papers Series wp996, William Davidson Institute at the University of Michigan.
  40. Shunsuke Managi & Samuel Mulenga Bwalya, 2010. "Foreign direct investment and technology spillovers in sub-Saharan Africa," Applied Economics Letters, Taylor & Francis Journals, vol. 17(6), pages 605-608.
  41. Hristos Doucouliagos & T.D. Stanley, 2008. "Theory Competition and Selectivity: Are All Economic Facts Greatly Exaggerated?," Economics Series 2008_06, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  42. Bwalya, Samuel Mulenga, 2006. "Foreign direct investment and technology spillovers: Evidence from panel data analysis of manufacturing firms in Zambia," Journal of Development Economics, Elsevier, vol. 81(2), pages 514-526, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cnb:wpaper:2011/07. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.