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Knowledge Spillovers from Foreign Direct Investment and the Role of Local R&D Activities: Evidence from Indonesia

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  • Todo, Yasuyuki
  • Miyamoto, Koji

Abstract

A large number of studies have used firm-level data to examine whether foreign direct investment (FDI) generates knowledge spillovers to domestically owned firms in less developed countries. However, the results are mixed. In this study, Indonesian plant-level panel data are used to test whether the often-ignored local R&D activities of foreign-owned firms in the host country enhance knowledge spillovers from FDI. The analysis found positive spillovers from R&D-performing foreign-owned firms, while spillovers from non-R&D-performing foreign-owned firms were absent.

Suggested Citation

  • Todo, Yasuyuki & Miyamoto, Koji, 2006. "Knowledge Spillovers from Foreign Direct Investment and the Role of Local R&D Activities: Evidence from Indonesia," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 173-200, October.
    • Handle: RePEc:ucp:ecdecc:y:2006:v:55:i:1:p:173-200
    DOI: 10.1086/505729
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