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Foreign Direct Investment and Productivity Spillovers: the Experience of ASEAN Countries

Author

Listed:
  • PIYAAREEKUL UTTAMA, Nathapornpan

    (Mae Fah Luang University)

  • PERIDY, Nicolas

    (Université du Sud Toulon-Var)

Abstract

This paper aims at investigating the productivity spillover effects of FDI inflows to ASEAN countries. A first contribution is related to the development of an original theoretical model of complex multinational firms which simultaneously explores backward and forward linkages due to FDI. As a second contribution, the significance of vertical productivity spillovers in ASEAN countries is tested empirically. For that purpose, and given the lack of data at firm level, the causal relationship between FDI and productivity is investigated by using countryspecific data. Several alternative causality tests are implemented, including both direct and indirect approaches. The main results give strong evidence that FDI causes productivity growth in ASEAN countries. These results correlate the prediction of the theoretical model, which provide a strong support for the relationship between FDI and productivity spillovers.

Suggested Citation

  • PIYAAREEKUL UTTAMA, Nathapornpan & PERIDY, Nicolas, 2010. "Foreign Direct Investment and Productivity Spillovers: the Experience of ASEAN Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 298-323.
    • Handle: RePEc:ris:integr:0506
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    Citations

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    Cited by:

    1. Jouini, Nizar & Oulmane, Nassim & Peridy, Nicolas, 2014. "North African countries (NACs) production and export structure: Towards diversification and export sophistication strategy," MPRA Paper 62476, University Library of Munich, Germany.
    2. Dewa Gede Sidan Raeskyesa & Reinardus Adhiputra Suryandaru, 2020. "Competitiveness and FDI Inflows in ASEAN Member Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 13(1), pages 14-20, April.
    3. Czesława Pilarska, 2018. "Efekty zewnętrzne bezpośrednich inwestycji zagranicznych z perspektywy kraju goszczącego," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 93-124.
    4. Ergun Dogan & Koi Nyen Wong & Michael M. C. Yap, 2017. "Vertical and Horizontal Spillovers from Foreign Direct Investment: Evidence from Malaysian Manufacturing," Asian Economic Papers, MIT Press, vol. 16(3), pages 158-183, Fall.
    5. Been‐Lon Chen & Shun‐Fa Lee, 2012. "Intersectoral Spillovers, Relative Prices and Development Traps," Review of Development Economics, Wiley Blackwell, vol. 16(2), pages 243-261, May.

    More about this item

    Keywords

    ASEAN; FDI; Spillover Effects; Panel Data;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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