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Refining vertical productivity spillovers from FDI: Evidence from 32 economies

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  • Mei, Jen-Chung

Abstract

Recent empirical contributions using sector-level data have outlined the importance of foreign direct investment backward spillovers on firms’ performances. Using a rich firm-level dataset, we construct measures of vertical linkages at the firm-level to include the differences in firms’ sourcing and supplying behaviour within an industry to better measure vertical spillovers derived from multinational activities. Our quantitative evidence shows that strong backward spillovers occur in our sample, while we find that both positive and negative spillover effects of forward linkages exist. In contrast, we find no evidence supporting the vertical spillovers in our data when using existing standard measures.

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  • Mei, Jen-Chung, 2021. "Refining vertical productivity spillovers from FDI: Evidence from 32 economies," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 176-191.
    • Handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:176-191
    DOI: 10.1016/j.iref.2021.02.009
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    Cited by:

    1. Jen‐Chung Mei, 2023. "Foreign direct investment and relative capacity: Theory and evidence," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1175-1214, October.
    2. Li, Xing & Chen, Xi & Hou, Keqiang, 2024. "FDI technology spillovers in Chinese supplier-customer networks," International Review of Financial Analysis, Elsevier, vol. 94(C).
    3. Bournakis, Ioannis & Mei, Jen-Chung, 2023. "Gender, firm performance, and FDI supply–purchase spillovers in emerging markets," International Economics, Elsevier, vol. 175(C), pages 90-105.
    4. Ioannis Bournakis & Jen-Chung Mei, 2023. "Embodied and Disembodied Spillovers from FDI: Sectoral Evidence from Ireland," Journal of Industry, Competition and Trade, Springer, vol. 23(1), pages 59-80, June.

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    More about this item

    Keywords

    Forward linkages; Backward linkages; FDI; Productivity spillovers;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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