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Foreign Direct Investment and Productivity Spillovers

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  • Salvador Barrios

Abstract

The aim of this paper is to analyse the impact of Foreign Direct Investment (FDI) on firm productivity using an establishment-level panel of Spanish manufacturing industry that spans the period 1990-1994. The key question concerns the elements that enable domestic firms to capture the positive spillovers associated with the presence of foreign firms. We use Research and Development (R&D) expenditure and trade data to represent the capacity of local firms to reap the benefits from FDI. Our results fail to identify positive spillovers for local firms while a negative correlation is detected in low R&D activities. Further evidence shows that positive externalities have been mainly captured by foreign affiliates. Overall, the general effects of FDI remain very limited in absolute terms compared to similar studies of developing countries.

Suggested Citation

  • Salvador Barrios, "undated". "Foreign Direct Investment and Productivity Spillovers," Working Papers 2000-19, FEDEA.
    • Handle: RePEc:fda:fdaddt:2000-19
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    References listed on IDEAS

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    Cited by:

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    2. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    3. Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
    4. Enrique López‐Bazo & Francisco Requena & Guadalupe Serrano, 2006. "Complementarity Between Local Knowledge And Internationalization In Regional Technological Progress," Journal of Regional Science, Wiley Blackwell, vol. 46(5), pages 901-929, December.
    5. Jordaan, Jacob A., 2005. "Determinants of FDI-induced externalities: New empirical evidence for Mexican manufacturing industries," World Development, Elsevier, vol. 33(12), pages 2103-2118, December.
    6. Tomáš Havránek & Zuzana Iršová, 2010. "Meta-Analysis of Intra-Industry FDI Spillovers: Updated Evidence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 60(2), pages 151-174, May.

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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