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Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?

  • Görg, Holger
  • Greenaway, David

Many governments offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits. This paper begins by reviewing possible sources of spillovers. It then provides a comprehensive evaluation of the empirical evidence on productivity, wages and exports spillovers in developing, developed and transitional economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is hard to find. The reasons for this are explored and the paper concludes with a review of policy aspects.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3485.

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Date of creation: Aug 2002
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Handle: RePEc:cpr:ceprdp:3485
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