Sectoral productivity and spillover effects of FDI in Latin America
Empirical studies analysing productivity effects of inward FDI in Latin America (LA) are inconclusive. We argue that investigating aggregate FDI masks interesting effects of FDI that take place within and across sectors. Moreover, the potential of FDI to generate productivity effects differs across sectors. For these reasons and because sectoral FDI intensities vary significantly among LA countries and change over time, we investigate the productivity effects of FDI in eight different sectors including the primary sector, manufacturing and services. Besides FDI, sector-specific institutional factors, education and a sector‘s export share are considered as control variables. Given the likely endogeneity of variables, a GMM system estimation approach is used. The results indicate that positive productivity effects can be found in all sectors, although they may depend on specific conditions or are limited to a certain time period. Direct productivity effects are highest in the primary sector (agriculture, mining and petroleum production) and in financial services. In contrast, FDI in manufacturing and in transport and telecommunications generates productivity spillovers to nearly all other sectors.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| |
|Order Information:|| Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna|
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.:
- Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
- L.R. de Mello Jr., 1996.
"Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data,"
Studies in Economics
9615, School of Economics, University of Kent.
- de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-51, January.
- Chang, Roberto & Kaltani, Linda & Loayza, Norman V., 2009.
"Openness can be good for growth: The role of policy complementarities,"
Journal of Development Economics,
Elsevier, vol. 90(1), pages 33-49, September.
- Roberto Chang, & Linda Kaltani & Norman Loayza, 2006. "Openness Can be Good for Growth: The Role of Policy Complementarities," Working Papers Central Bank of Chile 373, Central Bank of Chile.
- Roberto Chang & Linda Kaltani & Norman Loayza, 2005. "Openness can be good for Growth: The Role of Policy Complementarities," DEGIT Conference Papers c010_021, DEGIT, Dynamics, Economic Growth, and International Trade.
- Chang, Roberto & Kaltani, Linda & Loayza, Norman, 2005. "Openness can be good for growth : the role of policy complementarities," Policy Research Working Paper Series 3763, The World Bank.
- Roberto Chang & Linda Kaltani & Norman Loayza, 2005. "Openness Can be Good for Growth: The Role of Policy Complementarities," NBER Working Papers 11787, National Bureau of Economic Research, Inc.
- Eduardo Levy-Yeyati & Ugo Panizza & Ernesto Stein, 2002.
"The Cyclical Nature of North-South FDI Flows,"
Business School Working Papers
quince, Universidad Torcuato Di Tella.
- Eduardo Levy Yeyati & Ugo Panizza & Ernesto H. Stein, 2003. "The Cyclical Nature of North-South FDI Flows," Research Department Publications 4317, Inter-American Development Bank, Research Department.
- Eduardo Levy Yeyati & Ugo Panizza & Ernesto H. Stein, 2003. "The Cyclical Nature of North-South FDI Flows," IDB Publications (Working Papers) 6502, Inter-American Development Bank.
- JesÃºs Crespo Cuaresma & Carmen Fillat CastejÃ³n & Maria Antoinette Silgoner & Julia Woerz, 2007. "Blessing or Curse? An Industry-level Analysis of FDI Effects on Productivity and Wages in CEECs," Chapters, in: Foreign Direct Investment in Europe, chapter 4 Edward Elgar Publishing.
- Rivera-Batiz, Francisco L. & Rivera-Batiz, Luis A., 1990. "The effects of direct foreign investment in the presence of increasing returns due to specialization," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 287-307, November.
- Patricia Prüfer & Gabriele Tondl, 2009. "The FDI-Growth Nexus in Latin America: The Role of Source Countries and Local Conditions," DEGIT Conference Papers c014_025, DEGIT, Dynamics, Economic Growth, and International Trade.
- De Gregorio, Jose, 1992.
"Economic growth in Latin America,"
Journal of Development Economics,
Elsevier, vol. 39(1), pages 59-84, July.
When requesting a correction, please mention this item's handle: RePEc:wsr:wpaper:y:2010:i:053. 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: ()
If references are entirely missing, you can add them using this form.