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Observing FDI spillover transmission channels: evidence from firms in Uganda

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  • Binyam Afewerk Demena
  • Peter A. G. van Bergeijk

Abstract

We observe and analyse three intra-industry foreign direct investment (FDI) spillover transmission channels using unique firm-level data collected from on-site interviews and observations regarding domestic and foreign firms operating in Uganda in 2015. Our main results are: (1) the spillover effects mainly depend on the channel(s) by which they occur (the competition channel is most important while spillover benefits through the worker mobility and the imitation channels are less prevalent) and (2) both positive and negative spillover effects occur within the same channel and, moreover, effects differ by channel for the same case. These are novel and challenging findings that have not yet been recognised in theoretical and empirical research on FDI spillovers. Our results suggest that long-term pecuniary spillover effects are predominantly stimulated via the competition channel and show that only limited short-term and long-term technological spillover effects occur through the imitation and the movement of workers channels. These channels are not only less prevalent, but also appear to be constrained by competition-determined spillovers. We are confident that these directions for future research will have a high pay-off because, as shown by this exploratory fieldwork, a more complete picture of the spillover effects is reached when the channels are considered simultaneously.

Suggested Citation

  • Binyam Afewerk Demena & Peter A. G. van Bergeijk, 2019. "Observing FDI spillover transmission channels: evidence from firms in Uganda," Third World Quarterly, Taylor & Francis Journals, vol. 40(9), pages 1708-1729, September.
  • Handle: RePEc:taf:ctwqxx:v:40:y:2019:i:9:p:1708-1729
    DOI: 10.1080/01436597.2019.1596022
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    Cited by:

    1. Demena, B.A. & Msami, J. & Mmari, D.E. & van Bergeijk, P.A.G., 2021. "Productivity premia and firm heterogeneity in Eastern Africa," ISS Working Papers - General Series 680, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Liu, Yaping & Sadiq, Farah & Ali, Wajahat & Kumail, Tafazal, 2022. "Does tourism development, energy consumption, trade openness and economic growth matters for ecological footprint: Testing the Environmental Kuznets Curve and pollution haven hypothesis for Pakistan," Energy, Elsevier, vol. 245(C).
    3. Dobdinga Cletus Fonchamnyo & Ongo Nkoa Bruno Emmanuel & Gildas Dohba Dinga, 2021. "The effects of trade, foreign direct investment, and economic growth on environmental quality and overshoot: a dynamic common correlation effects approach," SN Business & Economics, Springer, vol. 1(10), pages 1-27, October.
    4. Yasmeen, Rizwana & Zhaohui, Cui & Hassan Shah, Wasi Ul & Kamal, Muhammad Abdul & Khan, Anwar, 2022. "Exploring the role of biomass energy consumption, ecological footprint through FDI and technological innovation in B&R economies: A simultaneous equation approach," Energy, Elsevier, vol. 244(PA).
    5. Manal Ayyad Dhif Alshammry & Saqib Muneer, 2023. "The influence of economic development, capital formation, and internet use on environmental degradation in Saudi Arabia," Future Business Journal, Springer, vol. 9(1), pages 1-16, December.
    6. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    7. El Kadi, Tin, 2024. "Learning along the Digital Silk Road? Technology transfer, power, and Chinese ICT corporations in North Africa," LSE Research Online Documents on Economics 122001, London School of Economics and Political Science, LSE Library.
    8. Aamir Javed & José Alberto Fuinhas & Agnese Rapposelli, 2023. "Asymmetric Nexus between Green Technology Innovations, Economic Policy Uncertainty, and Environmental Sustainability: Evidence from Italy," Energies, MDPI, vol. 16(8), pages 1-20, April.
    9. Najabat Ali & Khamphe Phoungthong & Kuaanan Techato & Waheed Ali & Shah Abbas & Joshuva Arockia Dhanraj & Anwar Khan, 2022. "FDI, Green Innovation and Environmental Quality Nexus: New Insights from BRICS Economies," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    10. Najid Ahmad & Fredj Jawadi & Muhammad Azam, 2023. "Do Multi-Market Institutions and Renewable Energy Matter for Sustainable Development: A Panel Data Investigation," Computational Economics, Springer;Society for Computational Economics, vol. 62(4), pages 1393-1411, December.
    11. Gustavo Canavire-Bacarreza & Luis Castro Peñarrieta, 2021. "Can licensing induce productivity? Exploring the IPR effect," Empirical Economics, Springer, vol. 61(2), pages 549-586, August.
    12. Muhammad Uzair Ali & Zhimin Gong & Muhammad Ubaid Ali & Xiong Wu & Chen Yao, 2021. "Fossil energy consumption, economic development, inward FDI impact on CO2 emissions in Pakistan: Testing EKC hypothesis through ARDL model," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3210-3221, July.
    13. Abdul Rauf & Najabat Ali & Muhammad Nauman Sadiq & Saira Abid & Shahzad Afzal Kayani & Abid Hussain, 2023. "Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies," Sustainability, MDPI, vol. 15(18), pages 1-18, September.
    14. Abdul Rahim Ridzuan & Vikniswari Vija Kumaran & Bayu Arie Fianto & Mohd Shahidan Shaari & Miguel Angel Esquivias & Aliashim Albani, 2022. "Reinvestigating the Presence of Environmental Kuznets Curve in Malaysia: The Role of Foreign Direct Investment," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 217-225, September.
    15. Sovath Kenh, 2023. "The impact of development strategy choice on capital mobility and economic growth," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1782-1813, October.

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