The role of inward foreign direct investment on entrepreneurship

Barbosa, Natália; Eiriz, Vasco

doi:10.1007/s11365-007-0050-3

Cited by 36 publications

(44 citation statements)

References 54 publications

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“…Burke et al (2007), Barbosa and Eiriz (2007) confirm an overall predominance of the "spillover" effect over the "crowd-out" effect in United Kingdom and Portugal. Likewise, Xu and Chang (2008) report the existence of the "spillover" and "crowd-out" effects in China nationwide and regionwide respectively.…”

Section: Devaluation and Business Formation In Different Competitive mentioning

confidence: 78%

Devaluation, Competitiveness and New Business Formation in Emerging Countries

Herrera-Echeverri

Haar

Jiménez

et al. 2015

J. Dev. Entrepreneurship

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In September 2010, Brazil’s Finance Minister, Guido Mantega, used the term “currency war” with reference to monetary policies implemented by different countries to generate an artificial devaluation of their currency and achieve a cheaper, more competitive domestic economy that may be attractive to foreign investors. Similar cases have been documented since the 1930’s Great Depression, when several countries abandoned the gold standard as backing for their currencies. More recently, a large-scale asset purchase by Japan’s Central Bank in 2013 was singled out as a strategy aimed at generating devaluation of the yen. This research uses statistics of new business formation density reported by Doing Business for 30 emerging countries in the period from 2004 through 2011 to evaluate the impact of devaluation measured by the behavior of the real effective exchange rate (REER) on the rate of new business formation (NBF). It is determined how variables associated with competitiveness affect the relationship between devaluation and business formation. Results show that devaluation has a positive effect on NBF in the short term, which gets diluted in the long term. Countries with greater competitiveness have less dependence on devaluation to increase the number of businesses.

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Section: Devaluation and Business Formation In Different Competitive mentioning

confidence: 78%

Devaluation, Competitiveness and New Business Formation in Emerging Countries

Herrera-Echeverri

Haar

Jiménez

et al. 2015

J. Dev. Entrepreneurship

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“…Some studies (Aitken and Harrison, 1999 in Venezuela;and Konings, 2001 in Bulgaria, Romania and Poland) conclude that, at best, the positive impact of FDI is minimal and the benefits limited to firms that have the highest foreign investment and dependency. Barbosa and Eiriz (2009) show that, in the case of Portugal, the impact of FDI is at first, positive; but long-term it has a negative impact upon business creation. Finally, De Backer and Sleuwaegen (2003) established that, in Belgium, the presence of FDI discouraged new entrepreneurs from setting up and hastened the demise of existing ones.…”

Section: Business Creation and Foreign Direct Investmentmentioning

confidence: 92%

Foreign Direct Investment, Institutional Quality, Economic Freedom and Entrepreneurship in Emerging Markets

2013

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This study investigates the relationship between foreign direct investment, institutional quality, economic freedom, and entrepreneurship in emerging markets. The research compares the capacity and appetite for business creation among high-income, low-income and emerging countries. The results are based on a panel study of data, from 2004 to 2009 for 87 countries, using as its source "The World Bank Entrepreneurship Snapshots" to look at the connection between business creation, institutional quality, market freedom and foreign direct investment (FDI). The findings reveal a strong positive relationship between institutional quality and business generation in all three of the above categories. Meanwhile, institutional quality and how this develops remains significant to business creation at least two years after a business is incubated, underscoring its importance as a contributory factor for creating an environment conducive to entrepreneurship. The freedom to create businesses and invest has a marked impact on business generation in emerging countries, while the influence of international trade appears more important as a spur to the genesis of business in low-income countries. Results also show that regulation of the free market has a short-term effect on business creation. Finally, there is a direct and significant relationship between FDI and business development in emerging countries. The effect of FDI is also felt for at least two years after the foreign investment. This result is consistent with "the spillover theory of entrepreneurship" (Acs et al, 2009;Görg and Strobl, 2002;Ayyagari et al, 2010).

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“…Their activities can be observed and imitated by local firms and hence enhance their own export prospects. Being suppliers or subcontractors to foreign companies, local firms are able to enjoy spillovers through backward and forward linkages with foreign firms and upgrade their capabilities through collaboration (Barbosa and Eiriz, 2009). This could include strategic alliances, technology sharing agreements, the mutual development of innovative products and practices, and cooperation on marketing and distribution contracts (Scott-Kennel, 2004).…”

Section: Hypothesesmentioning

confidence: 99%

Do Chinese Exporters Still Need Learning Spillovers from Foreign MNEs?

Zhao

Liu

Buck

2017

EURASIA J MATH SCI T

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The study investigates learning spillovers from local firms as well as MNEs in China, and their indirect effects on other firms' exporting, paying particular attention to inter-and intra-industry spillovers. We develop a synthetic model based on the treatment of spillovers in economics, geography and international business, testing four different spillover effects, measured by export propensity and intensity of local Chinese firms associated with four types of export agglomeration. We find significant, positive spillovers effects. Surprisingly, spillovers transmitted from locally-owned exporters to local firms turn out to be stronger than those from foreign-owned exporters to local firms. Unsurprisingly, spillovers transmitted within the same industry are stronger than with different industries. The evidence suggests that after 30 years of openness to international trade and export-oriented development, China's indigenous firms have started to make a significant contribution to the export performance of other local firms. This finding is different from findings from previous empirical analysis, which reveals that maybe there's a diminishing teaching effects from foreign MNEs to local firms.

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The role of inward foreign direct investment on entrepreneurship

Cited by 36 publications

References 54 publications

Devaluation, Competitiveness and New Business Formation in Emerging Countries

Devaluation, Competitiveness and New Business Formation in Emerging Countries

Foreign Direct Investment, Institutional Quality, Economic Freedom and Entrepreneurship in Emerging Markets

Do Chinese Exporters Still Need Learning Spillovers from Foreign MNEs?

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