Working Paper: CEPR ID: DP6383
Authors: Sourafel Girma; Holger Grg; Mauro Pisu
Abstract: In this paper we analyse productivity spillovers from foreign direct investment using firm level panel data UK manufacturing industries from 1992 to 1999. We investigate spillovers through horizontal, backward and forward linkages, distinguish spillovers from export oriented vs domestic market oriented FDI, and allow for differing effects depending on domestic firms? export activities. The results suggest that the mechanisms through which spillovers affect domestic firms are very complex and that there are substantial differences in spillover benefits for domestic exporters and non-exporters, and from different types of inward investment.
Keywords: absorptive capacity; exporting; foreign direct investment; linkages; productivity spillovers
JEL Codes: F1; F2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| horizontal spillovers from export-oriented multinationals (F23) | domestic exporters' productivity (O49) |
| domestic market-oriented FDI (F23) | domestic exporters' productivity (O49) |
| domestic market-oriented FDI (F23) | domestic non-exporters' productivity (O49) |
| export-oriented FDI (F23) | domestic suppliers' productivity (O49) |
| absorptive capacity of domestic firms (F23) | productivity spillovers from domestic market-oriented FDI (F23) |