Working Paper: CEPR ID: DP2350
Authors: Magnus Blomström; Steven Globerman; Ari Kokko
Abstract: This paper reviews and synthesizes the available literature focusing on the determinants of efficiency spillovers from inward FDI. In order to do so, we outline a theoretical framework for understanding the underlying 'supply' and 'demand' forces determining the scope and magnitude of FDI spillovers to host economies. The findings suggest that the competitiveness of host country markets and the technical capability of local firms are among the most important determinants of spillover benefits. Both of these characteristics can be influenced by host country policy.
Keywords: foreign direct investment; multinational corporations; spillovers
JEL Codes: F23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Competitiveness of host country markets (F23) | Spillover benefits (D62) |
| Technical capability of local firms (R53) | Efficiency of spillovers (D61) |
| Government policies (H59) | Competitiveness of host country markets (F23) |
| Government policies (H59) | Technical capability of local firms (R53) |