Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry

Blomström, Magnus; Persson, Håkan

doi:10.1016/0305-750x(83)90016-5

Cited by 495 publications

(240 citation statements)

References 7 publications

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“…For the China's economy to sustain a high-speed economic development, reform will have to become a long-term policy, whereas international trade can be adjusted to suit for growth and efficiency. Foreign direct investment can have an indirect effect on the domestic economy via positive spillovers and competition (Blomstrom and Persson, 1983). Our finding implies that, even though FDI have an important and positive effect on TE in the China's economy, it should be further encouraged to neutralize the downward trend of the effect.…”

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confidence: 74%

An analysis on technical efficiency in post-reform China

Zhou¹,

2011

China Economic Review

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Abstract:This paper employs a fully nonparametric stochastic frontier model with time and individual effects to study technical efficiency in China's post-reform economy. The panel data cover China's thirty provinces for the period of 1985-2008. The empirical results show that the average output elasticity of labor is larger than the other two inputs of capital and human capital. Based on the specified inefficiency Tobit model, the factor analysis on technical efficiency shows that the time effects of technical efficiency in China's post-reform economy are significantly contingent on the factors. There exists significant regional differences in technical efficiency in China's economic development, and a number of policy implications can be drawn.

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confidence: 74%

An analysis on technical efficiency in post-reform China

Zhou¹,

2011

China Economic Review

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“…Using an augmented production function, Caves found that the very presence of foreign firms had a positive impact on labour productivity in the industries studied. Subsequent studies of this type by Globerman [1979] for Canada, by Blomstrom and Persson [1983], Kokko [1994], and Blomstrom and Wolff [1994] for Mexico, by Kokko, Tansini and Zejan [1996] for the Uruguayan manufacturing sector, and by Liu et al [2000] for UK manufacturing, confirm positive productivity spillovers from FDI.…”

Section: Fdi and Productivitymentioning

confidence: 89%

The impact of foreign direct investment on labour productivity in the Chinese electronics industry

Liu

Parker

Vaidya

et al. 2001

International Business Review

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Foreign direct investment (FDI) may have a positive impact on labour productivity in recipient industries through direct introduction of capital, technology and management skills and indirectly through spillover effects on domestic firms. This study uses a model intended to examine the overall effects of inward FDI in the Chinese electronics industry. A panel data set is used for 41 sub-sectors of the industry in 1996 and 1997 having differing levels of FDI. Labour productivity is modelled as dependent on the degree of foreign presence in the industry and other variables, namely capital intensity, human capital and firm size for scale factors. Various econometric estimation techniques for panel data are compared to obtain an appropriate statistical model. The results suggest that foreign presence in the industry was associated with higher labour productivity.

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“…Several country studies have been carried out, providing diverging results on the role of FDI spillovers with respect to stimulating economic growth. Whereas positive effects from spillovers have been found for, HJ Mexico (Blomström and Persson, 1983;Blomström and Wolff, 1994;Kokko, 1994), Uruguay (Kokko, Tansini, and Zejan, 1996) and Indonesia (Sjöholm, 1999b), no spillovers were traced in studies for Morocco (Haddad and Henderson, 1993) and Venezuela (Aitken and Harrison, 1999). These diverging results may underline the crucial role of certain host country characteristics necessary to let FDI contribute positively to economic growth through spillovers.…”

Section: $%675$and7mentioning

confidence: 99%

Foreign direct investment, financial development and economic growth

Hermes

Lensink

2003

Journal of Development Studies

843

547

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This article argues that the development of the financial system of the recipient country is an important precondition for FDI to have a positive impact on economic growth. A more developed financial system positively contributes to the process of technological diffusion associated with FDI. The article empirically investigates the role the development of the financial system plays in enhancing the positive relationship between FDI and economic growth. The empirical investigation presented in the article strongly suggests that this is the case. Of the 67 countries in data set, 37 have a sufficiently developed financial system in order to let FDI contribute positively to economic growth. Most of these countries are in Latin America and Asia.

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Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry

Cited by 495 publications

References 7 publications

An analysis on technical efficiency in post-reform China

An analysis on technical efficiency in post-reform China

The impact of foreign direct investment on labour productivity in the Chinese electronics industry

Foreign direct investment, financial development and economic growth

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