How to Stir Up FDI Spillovers: Evidence from a Large Meta-Analysis
Charles University in Prague; Czech National Bank (CNB)
Charles University in Prague
October 26, 2011
William Davidson Institute Working Paper No. 1021
The voluminous empirical research on horizontal productivity spillovers from foreign investors to domestic firms in transition and developing countries has yielded mixed results. In this paper, we collect 1,205 estimates of horizontal spillovers from the literature and examine which factors influence spillover magnitude. To identify the most important determinants of spillovers among 43 collected variables, we employ Bayesian model averaging. Our results suggest that horizontal spillovers are on average zero, but that their sign and magnitude depend systematically on the characteristics of the domestic economy and foreign investors. The most important determinants are the technology gap between domestic and foreign firms and the ownership structure in investment projects. Foreign investors who form joint ventures with domestic firms and who come from countries with a modest technology edge create the largest benefits for the domestic economy.
Number of Pages in PDF File: 28
Keywords: Bayesian model averaging, Foreign direct investment, Productivity spillovers, Determinants Meta-analysis
JEL Classification: C83, F23, O12working papers series
Date posted: January 30, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.547 seconds