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FDI, Global Value Chains, and Local Sourcing in Developing Countries

Author

Listed:
  • Vito Amendolagine
  • Mr. Andrea F Presbitero
  • Roberta Rabellotti
  • Marco Sanfilippo
  • Adnan Seric

Abstract

The local sourcing of intermediate products is one the main channels for foreign direct investment (FDI) spillovers. This paper investigates whether and how participation and positioning in the global value chains (GVCs) of host countries is associated to local sourcing by foreign investors. Matching two firm-level data sets of 19 Sub-Saharan African countries and Vietnam to country-sector level measures of GVC involvement, we find that more intense GVC participation and upstream specialization are associated to a higher share of inputs sourced locally by foreign investors. These effects are larger in countries with stronger rule of law and better education.

Suggested Citation

  • Vito Amendolagine & Mr. Andrea F Presbitero & Roberta Rabellotti & Marco Sanfilippo & Adnan Seric, 2017. "FDI, Global Value Chains, and Local Sourcing in Developing Countries," IMF Working Papers 2017/284, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/284
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    Citations

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    Cited by:

    1. Óscar Rodil-Marzábal & Ana Laura Gómez Pérez & Hugo Campos-Romero, 2022. "The Global Textile and Apparel Value Chain: From Mexico–US–China Linkages to a Global Approach," Economies, MDPI, vol. 10(10), pages 1-18, October.
    2. Valentina De Marchi & Eleonora Di Maria, 2019. "Environmental Upgrading and Suppliers’ Agency in the Leather Global Value Chain," Sustainability, MDPI, vol. 11(23), pages 1-17, November.
    3. Yeboah, Samuel, 2023. "Navigating Global Markets: The Impact of FDI on Startups' Access to Insights, Networks, and Brand Visibility," MPRA Paper 118437, University Library of Munich, Germany, revised 30 Aug 2023.
    4. Sharadendu Sharma & Rahul Arora, 2023. "Macroeconomic Determinants of India’s Participation in Global Value Chains: An Empirical Evidence," Journal of Asian Economic Integration, , vol. 5(1), pages 7-28, April.
    5. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2020. "Japan's FDI drivers in a time of financial uncertainty. New evidence based on Bayesian Model," Working Papers 2007, Department of Applied Economics II, Universidad de Valencia.
    6. Laget,Edith & Roch,Nadia & Varela,Gonzalo J., 2021. "Deep Trade Agreement and Foreign Direct Investments," Policy Research Working Paper Series 9829, The World Bank.
    7. Federico Carril-Caccia, 2020. "Will the Future EU-UK Free Trade Agreement Affect Foreign Direct Investment?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(4), pages 266-270, July.
    8. Matthew Stephenson & Mohammed Faiz Shaul Hamid & Augustine Peter & Karl P. Sauvant & Adnan Seric & Lucia Tajoli, 2021. "More and better investment now! How unlocking sustainable and digital investment flows can help achieve the SDGs," Journal of International Business Policy, Palgrave Macmillan, vol. 4(1), pages 152-165, March.
    9. Yeboah, Samuel, 2023. "Navigating Global Markets: The Impact of FDI on Startups' Access to Insights, Networks, and Brand Visibility," MPRA Paper 118434, University Library of Munich, Germany, revised 30 Aug 2023.
    10. Camarero, Mariam & Moliner, Sergi & Tamarit, Cecilio, 2021. "Japan's FDI drivers in a time of financial uncertainty. New evidence based on Bayesian Model Averaging," Japan and the World Economy, Elsevier, vol. 57(C).
    11. Lejárraga,Iza & Ragoussis,Alexandros, 2018. "Beyond Capital : Monitoring Development Outcomes of Multinational Enterprises," Policy Research Working Paper Series 8686, The World Bank.

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