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Foreign Direct Investment and Export Spillovers: How Do Export Platforms Fare?

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  • Frances Ruane
  • Julie Sutherland

Abstract

Should economies that promote themselves as export platforms for FDI be expected to experience relatively high levels of export spillovers from foreign to host-country enterprises? To investigate how export decisions of host-country enterprises are associated with the presence and export intensity of foreign-owned enterprises (FOEs) in an export-platform economy we use enterprise-level data for the manufacturing sector in Ireland. We postulate that export spillovers from FOEs are dependent upon the sectoral presence and export intensity of FOEs, so that third country export-platform FDI may not result in positive export spillovers to host-country enterprises. We find that the decision by host-country enterprises to enter the export market is positively associated with the presence of FOEs in their sector. However, the export intensity of host-country enterprises is negatively associated with the export sales ratios of FOEs, a result that contrasts with evidence of positive FOE export intensity spillovers in most previous empirical studies. Classification-

Suggested Citation

  • Frances Ruane & Julie Sutherland, 2005. "Foreign Direct Investment and Export Spillovers: How Do Export Platforms Fare?," The Institute for International Integration Studies Discussion Paper Series iiisdp058, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp058
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    Cited by:

    1. Shauna Phillips & Fredoun Z. Ahmadi-Esfahani, 2010. "Export market participation, spillovers, and foreign direct investment in Australian food manufacturing," Agribusiness, John Wiley & Sons, Ltd., vol. 26(3), pages 329-347.
    2. Florian Mayneris & Sandra Poncet, 2011. "Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers," Working Papers 2011-32, CEPII research center.
    3. Chiara Franco & Subash Sasidharan, 2009. "MNEs and Export Spillovers: An Analysis of Indian Manufacturing Industries," Working Papers 2009-049, Madras School of Economics,Chennai,India.
    4. Patrik Karpaty & Richard Kneller, 2011. "Demonstration or congestion? Export spillovers in Sweden," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 109-130, April.
    5. Qun Bao & Ninghua Ye & Ligang Song, 2016. "Congested Export Spillover in China," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 272-282, February.
    6. CHRIS MILNER & DANNY McGOWAN, 2013. "Trade Costs And Trade Composition," Economic Inquiry, Western Economic Association International, vol. 51(3), pages 1886-1902, July.
    7. Yang, Chih-Hai & Tsou, Meng-Wen, 2015. "Multinational exposure, export variety and price: Evidence from Chinese electronics exporters," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 93-110.
    8. Deborah L. Swenson, 2008. "Multinationals and the creation of Chinese trade linkages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 596-618, May.
    9. Florian Mayneris & Sandra Poncet, 2010. "Export Performance of China's Domestic Firms: the Role of Foreign Export Spillovers," Working Papers 2010-32, CEPII research center.
    10. Roberto Alvarez & Ricardo A. López, 2008. "Entry and Exit in International Markets: Evidence from Chilean Data," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 692-708, September.
    11. Andrea Ciani & Michele Imbruno, 2017. "Microeconomic mechanisms behind export spillovers from FDI: evidence from Bulgaria," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 703-734, November.
    12. Franco, Chiara, 2013. "Exports and FDI motivations: Empirical evidence from U.S. foreign subsidiaries," International Business Review, Elsevier, vol. 22(1), pages 47-62.
    13. Roberto Alvarez & Ricardo A. López, 2008. "Is Exporting a Source of Productivity Spillovers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 723-749, December.
    14. Franco, Chiara & Sasidharan, Subash, 2010. "MNEs, technological efforts and channels of export spillover: An analysis of Indian manufacturing industries," Economic Systems, Elsevier, vol. 34(3), pages 270-288, September.
    15. Minjung Kim, 2015. "Productivity spillovers from FDI and the role of domestic firm’s absorptive capacity in South Korean manufacturing industries," Empirical Economics, Springer, vol. 48(2), pages 807-827, March.
    16. C. Franco, 2009. "Exports and FDI motivations: empirical evidence from US foreign subsidiaries," Working Papers 687, Dipartimento Scienze Economiche, Universita' di Bologna.
    17. Richard Kneller & Mauro Pisu, 2007. "Industrial Linkages and Export Spillovers from FDI," The World Economy, Wiley Blackwell, vol. 30(1), pages 105-134, January.
    18. Frances Ruane & Ali U?ur, 2005. "Export Platform FDI and Dualistic Development," The Institute for International Integration Studies Discussion Paper Series iiisdp028, IIIS.
    19. Célio Hiratuka & Rogério Dias de Araújo, 2006. "Exportações Das Firmas Domésticas E Influência Das Firmas Transnacionais," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 128, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    20. Iwasaki, Ichiro & Csizmadia, Péter & Illéssy, Miklós & Makó, Csaba & Miklós Szanyi, 2010. "Foreign Direct Investment, Information Spillover, and Export Decision : The Concentric-Circle Model with Application to Hungarian Firm-Level Data," Discussion Paper Series a527, Institute of Economic Research, Hitotsubashi University.

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    Keywords

    FDI; export spillovers; export platforms.;

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