Which Domestic Firms Benefit from FDI? Evidence from Selected African Countries

22 Pages Posted: 4 Aug 2015

See all articles by Amadou Boly

Amadou Boly

African Development Bank

Nicola D. Coniglio

Università degli Studi di Bari “Aldo Moro” (UNIBA) - Department of Economics and Mathematical Methods

Francesco Prota

University of Bari - Department of Economics and Finance

Adnan Seric

United Nations Industrial Development Organization (UNIDO)

Date Written: September 2015

Abstract

The existing literature on the effects of FDI inflows on domestic firms' performance offers ambiguous evidence. Macro‐level studies suggest that the characteristics of inward FDI and the ‘absorptive capacity’ of the host economy matter in determining the sign (or the mere existence) of these effects. Studies based on micro‐level data have so far mostly focused on finding a nexus between FDI inflows and the productivity of domestic firms, suggesting that the effects might be highly heterogeneous. This article, using a recent firm‐level survey conducted by UNIDO in 19 sub‐Saharan African countries, explores the channels through which multinational enterprises may exert an impact on local firms: products’ market, input availability and costs, access to finance and export opportunities, and analyses the strategic reactions of domestic firms induced by the presence of foreign affiliates.

Keywords: Foreign direct investments, Spillovers, forward and backward linkages, Africa

Suggested Citation

Boly, Amadou and Coniglio, Nicola D. and Prota, Francesco and Seric, Adnan, Which Domestic Firms Benefit from FDI? Evidence from Selected African Countries (September 2015). Development Policy Review, Vol. 33, Issue 5, pp. 615-636, 2015, Available at SSRN: https://ssrn.com/abstract=2639422 or http://dx.doi.org/10.1111/dpr.12130

Amadou Boly (Contact Author)

African Development Bank ( email )

Rue Joseph Anoma
Abidjan, Ivory Coast 01 BP 1387
Ivory Coast (Cote D'ivoire)

Nicola D. Coniglio

Università degli Studi di Bari “Aldo Moro” (UNIBA) - Department of Economics and Mathematical Methods ( email )

Largo Abbey St. Scholastica
Bari, 70124
Italy

HOME PAGE: http://www.dse.uniba.it/Corsi/docenti/Coniglio/Nicola_paginaWeb.htm

Francesco Prota

University of Bari - Department of Economics and Finance ( email )

Largo Abbey St. Scholastica
Bari, 70124
Italy

HOME PAGE: http://www.uniba.it/docenti/prota-francesco

Adnan Seric

United Nations Industrial Development Organization (UNIDO) ( email )

Wagramer Strasse 5
P.O. Box 300
Vienna, A-1400
Austria

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