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Foreign direct investment and technical progress in Spanish manufacturing

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  • J. Rosell-Martinez

    (Business Economics - Centro Universitario de la Defensa de Zaragoza, Business Economics - Universidad de Zaragoza = University of Zaragoza [Saragossa University] = Université de Saragosse)

  • P. Sanchez-Sellero

    (Business Economics - Universidad de Zaragoza = University of Zaragoza [Saragossa University] = Université de Saragosse)

Abstract

This paper analyzes the effects of foreign direct investment on technical progress in Spanish manufacturing. Particularly, we study how foreign direct investment (FDI)'s contributions vary depending on the economic structure of the industry. The results show that most FDI goes to capital-intensive sectors, especially when those sectors are also research and development (R&D)-intensive. Our estimates of the Solow residual show that the positive effect of contemporaneous and lagged FDI on manufacturing productivity is only attributable to capital- and R&D-intensive industries in what seems to be related to a dynamic capabilities explanation or to complementarities with R&D expenditures.

Suggested Citation

  • J. Rosell-Martinez & P. Sanchez-Sellero, 2011. "Foreign direct investment and technical progress in Spanish manufacturing," Post-Print hal-00693830, HAL.
  • Handle: RePEc:hal:journl:hal-00693830
    DOI: 10.1080/00036846.2011.564155
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