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Technology Spillover of Foreign Direct Investment: An Analysis of Different Clusters in India

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  • Behera, Smruti Ranjan Behera
  • Dua, Pami Dua
  • Goldar, Bishwanath Goldar

Abstract

This paper explores the technology spillover effect of foreign direct investment (FDI) in Indian manufacturing industries across different clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional one. The empirical findings reveal significant variations across clusters with regard to spillovers. While some clusters benefit from cluster-specific foreign presence and technology stock, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and region-specific technology stock.

Suggested Citation

  • Behera, Smruti Ranjan Behera & Dua, Pami Dua & Goldar, Bishwanath Goldar, 2012. "Technology Spillover of Foreign Direct Investment: An Analysis of Different Clusters in India," MPRA Paper 43840, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:43840
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    File URL: https://mpra.ub.uni-muenchen.de/43840/1/MPRA_paper_43840.pdf
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    References listed on IDEAS

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    6. Kokko, Ari, 1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Elsevier, vol. 43(2), pages 279-293, April.
    7. Pack, Howard & Saggi, Kamal, 2001. "Vertical technology transfer via international outsourcing," Journal of Development Economics, Elsevier, vol. 65(2), pages 389-415, August.
    8. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July.
    9. Brun, J. F. & Combes, J. L. & Renard, M. F., 2002. "Are there spillover effects between coastal and noncoastal regions in China?," China Economic Review, Elsevier, vol. 13(2-3), pages 161-169.
    10. Kohpaiboon, Archanun, 2006. "Foreign direct investment and technology spillover: A cross-industry analysis of Thai manufacturing," World Development, Elsevier, vol. 34(3), pages 541-556, March.
    11. Michael E. Porter, 2000. "Location, Competition, and Economic Development: Local Clusters in a Global Economy," Economic Development Quarterly, , vol. 14(1), pages 15-34, February.
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    13. 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.
    14. repec:spr:stmapp:v:13:y:2004:i:3:d:10.1007_s10260-004-0088-0 is not listed on IDEAS
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    Cited by:

    1. Bishwanath Goldar & Karishma Banga, 2018. "Country Origin of Foreign Direct Investment in Indi an Manufacturing and Its Impact on Productivity of Domestic Firms," Working Papers id:12730, eSocialSciences.

    More about this item

    Keywords

    Foreign Direct Investment; Technology Spillover; Clusters; Firm location;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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