DP3485 Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?
|Author(s):||Holger Görg, David Greenaway|
|Publication Date:||August 2002|
|Keyword(s):||foreign direct investment, productivity spillovers, technology transfer|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3485|
Many governments offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits. This paper begins by reviewing possible sources of spillovers. It then provides a comprehensive evaluation of the empirical evidence on productivity, wages and exports spillovers in developing, developed and transitional economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is hard to find. The reasons for this are explored and the paper concludes with a review of policy aspects.