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FDI and Host Country Productivity: A Review


  • Argentino Pessoa

    () (Faculdade de Economia, Universidade do Porto, Portugal)


This paper reviews arguments and empirical findings on positive effects of FDI on host country firms. With the exception of the only unambiguous result of microeconometric studies, which is the superior productivity of foreign firms, the main conclusion extracted from empirical studies is the diversity of results. This diversity suggests that FDI will have different effects depending on the ‘technological congruence’ and ‘social capability’ of the host economy, as well as the familiarity of indigenous firms to products and technology of a given multinational corporation.

Suggested Citation

  • Argentino Pessoa, 2007. "FDI and Host Country Productivity: A Review," FEP Working Papers 251, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:251

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    References listed on IDEAS

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    Cited by:

    1. Ramstetter, Eric D. & Haji Ahmad, Shahrazat Binti, 2013. "Do Multinationals Use Water and Energy Relatively Efficiently in Malaysian Manufacturing?," AGI Working Paper Series 2013-16, Asian Growth Research Institute.
    2. Ramstetter, Eric D. & Kohpaiboon, Archanun, 2013. "Foreign Ownership and Energy Efficiency in Thailand’s Local Manufacturing Plants," AGI Working Paper Series 2013-15, Asian Growth Research Institute.
    3. Paula Neto & António Brandão & António Cerqueira, 2008. "The Impact of FDI, Cross Border Mergers and Acquisitions and Greenfield Investments on Economic Growth," FEP Working Papers 291, Universidade do Porto, Faculdade de Economia do Porto.
    4. Ramstetter, Eric D. & Narjoko, Dionisius, 2013. "Foreign Ownership, State Ownership and Energy Efficiency in Indonesia's Private Manufacturing Plants," AGI Working Paper Series 2013-17, Asian Growth Research Institute.

    More about this item


    Economic Growth; Foreign Direct Investment; Multinational Corporations; Spillovers; Technology Transfer;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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