A Meta‐analysis of Fdi and Productivity Spillovers in Developing Countries

Demena, Binyam Afewerk; Bergeijk, Peter A.G. van

doi:10.1111/joes.12146

Cited by 97 publications

(68 citation statements)

References 94 publications

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“…Spillovers may therefore not emerge evenly across firms, or be equally valuable to all firms. However, most studies have attempted to test spillover effects regardless of the nature of firm-level heterogeneity (Demena and van Bergeijk 2017). The empirical design of existing studies recognizes the importance of factor input and its quality, but fail to include some important firm-level heterogeneity characteristics.…”

Section: Spillover Channels and Firm-level Heterogeneitymentioning

confidence: 99%

“…We note that there is no consensus on the appropriateness of the one-step versus the two-step approach. However, a recent meta-analysis suggests a one-step approach given that this literature has been influenced by a selection bias towards positive estimates (Demena and van Bergeijk 2017). Hence, we opted for a direct approach of labour productivity.…”

Section: Empirical Approachmentioning

confidence: 99%

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Transmission channels matter: Identifying spillovers from FDI

Demena

Murshed

2018

The Journal of International Trade & Economic Development

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The empirical literature on the spillovers of foreign direct investment (FDI) has so far not analysed the well-established theoretical transmission channels through which FDI impacts on domestic firms. This paper shows how channels of transmission matter for productivity spillovers from FDI by providing more fuller and nuanced picture of the effects. We analyse a panel of eight sub-Saharan Africa countries spanning the period 2006-2014 and demonstrate the empirical relevance of distinguishing three channelsdemonstration, labour mobility, and competition. We provide measures of these effects and also show that the size, significance, and sign of spillover effects depend on the local absorptive capacity, technology levels, geographical proximity, and foreign ownership structure. Overall, results suggest that demonstration spillovers are large and economically significant, whereas the patterns of labour mobility and competition spillovers are not stable across the various specifications and measures. Finally, the analysis involves several measures of further investigations and robustness checks. Results are robust to the construction of spillover and outcome variables, the introduction of additional explanatory variables and an alternative estimation method.

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Section: Spillover Channels and Firm-level Heterogeneitymentioning

confidence: 99%

Section: Empirical Approachmentioning

confidence: 99%

Transmission channels matter: Identifying spillovers from FDI

Demena

Murshed

2018

The Journal of International Trade & Economic Development

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“… Instead, many studies focus on the productivity spillover of FDI on local firms in developing countries. See Demena and van Bergeijk () for a survey. …”

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confidence: 99%

Firm heterogeneity, market choice and productivity: Evidence from foreign‐owned enterprises in China

Yang

Tsou

2018

World Economy

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This study examines the effects of firm heterogeneity on foreign‐owned enterprises’ (FOEs) choices regarding serving the local market, undertaking assembly exports or undertaking ordinary exports. It also investigates the effects of serving these markets on productivity. Using a detailed firm–transaction level matched data set of FOEs in China covering 2000–07, the first‐stage estimation of propensity score matching (PSM) method reveals that less productive FOEs tend to undertake assembly exports, and this effect is particularly relevant to those located in inland regions. By contrast, more productive FOEs are likely to serve domestic markets or undertake ordinary exports. Other firm characteristics also exhibit diverse influences on market choices. Export‐oriented FOEs, particularly those undertaking assembly exports, experience lower productivity growth than that of local market‐oriented FOEs. This suggests that the effects of local market competition do result in substantial enhancement of the productivity of FOEs in China. This pattern is mainly exhibited by FOEs in inland regions, whereas FOEs undertaking ordinary exports in coastal regions might have somewhat higher total factor productivity (TFP) growth than their local market‐oriented counterparts. Among export‐oriented FOEs, exporting more product value—whether assembly or ordinary exports—has a positive influence on productivity.

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“…For example, see Asiedu (2006); ; Spencer (2008); Robinson et al (2006). 4 See Demena and van Bergeijk (2016) for micro studies. 5 For excellent surveys of the early literature on the private versus public return of R&D see Hall (1996) and David et al (2000).…”

Section: Introductionmentioning

confidence: 99%

Taking stock of firm-level and country-level benefits from foreign direct investment

Bruno

Campos

Estrin

2018

MBR

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The empirical literature has not reached a conclusion as to whether foreign direct investment (FDI) yields spillovers when the host economies are emerging. Instead, the results are often viewed as conditional. For macro studies, this means that the existence and scale of spillover effects is contingent on the levels of institutional, financial or human capital development attained by the host economies. For enterprise level studies, conditionality relates to the type of inter-firm linkages; forwards, backwards, or horizontal. In this paper, we conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities. We propose a new methodological framework that allows country-and firm-level effects to be combined. We handcollected information from 175 studies and around 1100 estimates in Eastern Europe, Asia, Latin America and Africa from 1940 to 2008. The two main findings are that: (a) "macro" effects are much larger than enterprise-level ones, by a factor of at least six; and (b) the benefits from FDI into emerging economies are substantially less "conditional" than commonly thought. Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth, European Economic Review, 48(2), 285-306.

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A Meta‐analysis of Fdi and Productivity Spillovers in Developing Countries

Cited by 97 publications

References 94 publications

Transmission channels matter: Identifying spillovers from FDI

Transmission channels matter: Identifying spillovers from FDI

Firm heterogeneity, market choice and productivity: Evidence from foreign‐owned enterprises in China

Taking stock of firm-level and country-level benefits from foreign direct investment

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