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Author: Jim Huangnan Shen
Publisher:
ISBN:
Category :
Languages : en
Pages : 24
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Book Description
This paper constructs a two-stage sequential game model to investigate the spillover effect of inward FDI on improving the efficiency of domestic firms in host countries. Our model shows that, given the optimal joint-venture policy made by foreign firms, the impact of spillover effect of inward FDI is contingent upon the productivity gap between the domestic firms and foreign ones. In particular, we demonstrate that the spillover effect of FDI inward varies negatively with the productivity gap between domestic low-productivity firms and foreign firms and works conversely for high-productivity firms. This result suggests that once the productivity gap widens, the entry of foreign firms will increase the efficiency of high-productivity firms and reduce the efficiency of low-productivity firms. The implication of our theoretical predictions is that once the productivity of domestic firms (high-productivity firms) is close enough to the world productivity frontier, they will incur the positive spillover effect from the entry of foreign firms. In contrast, the domestic firms with low productivity which are more distant from the world productivity frontier will perform worse owing to the entry of foreign firms, thus leading to the negative spillover effect. Using the data from over 570,000 firms in Chinese manufacturing industry in 2011, we advance the understanding of the theoretical model through empirical analysis.
Author: Jim Huangnan Shen
Publisher:
ISBN:
Category :
Languages : en
Pages : 24
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Book Description
This paper constructs a two-stage sequential game model to investigate the spillover effect of inward FDI on improving the efficiency of domestic firms in host countries. Our model shows that, given the optimal joint-venture policy made by foreign firms, the impact of spillover effect of inward FDI is contingent upon the productivity gap between the domestic firms and foreign ones. In particular, we demonstrate that the spillover effect of FDI inward varies negatively with the productivity gap between domestic low-productivity firms and foreign firms and works conversely for high-productivity firms. This result suggests that once the productivity gap widens, the entry of foreign firms will increase the efficiency of high-productivity firms and reduce the efficiency of low-productivity firms. The implication of our theoretical predictions is that once the productivity of domestic firms (high-productivity firms) is close enough to the world productivity frontier, they will incur the positive spillover effect from the entry of foreign firms. In contrast, the domestic firms with low productivity which are more distant from the world productivity frontier will perform worse owing to the entry of foreign firms, thus leading to the negative spillover effect. Using the data from over 570,000 firms in Chinese manufacturing industry in 2011, we advance the understanding of the theoretical model through empirical analysis.
Author: Jurgen Bitzer
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper investigates the productivity effects of inward and outward foreign direct investment using industry and country level data for 17 OECD countries. The paper relates to a large recent literature on productivity spillovers from inward FDI, however, we also consider the relationship between productivity and outward FDI in the same estimation. Our results show that there are, on average, productivity benefits from inward FDI, although we can identify a number of countries which, on aggregate, do not appear to benefit in terms of productivity. On the other hand, a country's stock of outward FDI is, on average, negatively related to productivity. However, again there is substantial heterogeneity in the effect across OECD countries.
Author: Sourafel Girma
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
This paper focuses on the role of absorptive capacity in determining whether or not domestic firms benefit from productivity spillovers from FDI using establishment level data for the UK. We allow for different effects of FDI on establishments located at different quantiles of the productivity distribution by using conditional quantile regression. Overall, while there is some heterogeneity in results across sectors and quantiles, our findings clearly suggest that absorptive capacity matters for productivity spillover benefits. We find evidence for a u-shaped relationship between productivity growth and FDI interacted with absorptive capacity. We also analyse in some detail the impact of changes in absorptive capacity on establishments' ability to benefit from spillovers.
Author: Thomas Farole
Publisher: World Bank Publications
ISBN: 1464801266
Category : Business & Economics
Languages : en
Pages : 302
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Book Description
This book presents the results of a groundbreaking study on ‘spillovers’ of knowledge and technology from global value-chain oriented foreign direct investment (FDI) in Sub-Saharan Africa, and discusses implications for policymakers hoping to harness the power of FDI for economic development.
Author: Galina Hale
Publisher:
ISBN:
Category :
Languages : en
Pages : 37
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Book Description
We review previous literature on productivity spillovers of foreign direct investment (FDI) in China and conduct our own analysis using a cross--section of firm data. We find that the evidence of FDI spillovers on the productivity of Chinese domestic firms is mixed, with many positive results largely due to aggregation bias or failure to control for endogeneity of FDI. Attempting over 2500 specifications which take into account forward and backward linkages, we find no evidence of systematic positive productivity spillovers from FDI. We do, however, find robust evidence that Chinese private firms tend to invest less in innovation in the presence of FDI. Combined with our previous findings that domestic private firms tend to be more involved in providing inputs and intermediary goods for foreign firms (Hale and Long, 2006), these results suggest a more passive role played by domestic firms in the global division of labor than envisioned by the Chinese government.
Author:
Publisher:
ISBN:
Category : Industrial productivity
Languages : en
Pages :
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Book Description
Author: Robert E. Baldwin
Publisher: University of Chicago Press
ISBN: 0226036553
Category : Business & Economics
Languages : en
Pages : 560
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Book Description
People passionately disagree about the nature of the globalization process. The failure of both the 1999 and 2003 World Trade Organization's (WTO) ministerial conferences in Seattle and Cancun, respectively, have highlighted the tensions among official, international organizations like the WTO, the International Monetary Fund (IMF), the World Bank, nongovernmental and private sector organizations, and some developing country governments. These tensions are commonly attributed to longstanding disagreements over such issues as labor rights, environmental standards, and tariff-cutting rules. In addition, developing countries are increasingly resentful of the burdens of adjustment placed on them that they argue are not matched by commensurate commitments from developed countries. Challenges to Globalization evaluates the arguments of pro-globalists and anti-globalists regarding issues such as globalization's relationship to democracy, its impact on the environment and on labor markets including the brain drain, sweat shop labor, wage levels, and changes in production processes, and the associated expansion of trade and its effects on prices. Baldwin, Winters, and the contributors to this volume look at multinational firms, foreign investment, and mergers and acquisitions and present surprising findings that often run counter to the claim that multinational firms primarily seek countries with low wage labor. The book closes with papers on financial opening and on the relationship between international economic policies and national economic growth rates.
Author: Laura Alfaro
Publisher: International Monetary Fund
ISBN: 1451859481
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and economic development. We model an economy with a continuum of agents indexed by their level of ability. Agents can either work for the foreign company or undertake entrepreneurial activities, which are subject to a fixed cost. Better financial markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in contributing to development.
Author: Luosha Du
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 0
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Book Description
A number of recent studies examine productivity spillovers from foreign direct investment (FDI) to China's domestic industrial enterprises. This study goes further by investigating the implications of institutions for the nature of productivity spillovers during 1998-2007. We examine three institutional features that comprise aspects of China's "special characteristics": (1) the different sources of FDI, where FDI is nearly evenly divided between mostly Organization for Economic Co-operation and Development (OECD) countries and the region known as "Greater China", consisting of Hong Kong, Taiwan, and Macau; (2) China's heterogeneous ownership structure, involving state- (SOEs) and non-state owned (non-SOEs) enterprises, firms with foreign equity participation, and non-SOE, domestic firms; and (3) industrial promotion via tariffs or through tax holidays to foreign direct investment. We also explore how productivity spillovers from FDI changed with China's entry into the WTO in late 2001. We find robust positive and significant spillovers to domestic firms via backward linkages (the contacts between foreign buyers and local suppliers). Our results suggest varied success with industrial promotion policies. Final goods tariffs as well as input tariffs are negatively associated with firm-level productivity. However, we find that productivity spillovers were higher from foreign firms that paid less than the statutory corporate tax rate.
Author: Peter J. Buckley
Publisher:
ISBN: 9781788112161
Category : International business enterprises
Languages : en
Pages : 0
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Book Description
"The rapid international expansion of Chinese businesses has evoked mixed perceptions in host countries and among policymakers. This volume brings together rigorous studies on the motivation, background, strategy, and impact of Chinese outward foreign direct investment and the emergence of Chinese multinational enterprises (MNEs). It is thus informative for the next wave of academic research on Chinese and emerging market MNEs in international business, political economy, economic geography and political sciences. Together with an original introduction by the editors, this valuable collection provides an important backdrop for academics who intend to understand emerging market MNEs in order to advise policymakers"--
