Technology transfers, foreign investment and productivity spillovers

TY - JOUR

T1 - Technology transfers, foreign investment and productivity spillovers

AU - Newman, Carol

AU - Rand, John

AU - Talbot, Theodore Purdendu

AU - Tarp, Finn

N1 - JEL classification: D22; F21; O12; O3

PY - 2015/5/1

Y1 - 2015/5/1

N2 - This paper explores the relationship between foreign direct investment (FDI) and the productivity of host country domestic firms. We rely on a specially designed survey of over 4000 manufacturing firms in Vietnam, and separate out productivity gains along the supply chain (obtained through direct transfers of knowledge/technology between linked firms) from productivity effects through indirect FDI spillovers. In addition to identifying indirect vertical productivity spillovers from FDI, our results show that there are productivity gains associated with direct linkages between foreign-owned and domestic firms along the supply chain not captured by commonly used measures of spillovers. This includes evidence of productivity gains through forward linkages for domestic firms which receive inputs from foreign-owned firms.

AB - This paper explores the relationship between foreign direct investment (FDI) and the productivity of host country domestic firms. We rely on a specially designed survey of over 4000 manufacturing firms in Vietnam, and separate out productivity gains along the supply chain (obtained through direct transfers of knowledge/technology between linked firms) from productivity effects through indirect FDI spillovers. In addition to identifying indirect vertical productivity spillovers from FDI, our results show that there are productivity gains associated with direct linkages between foreign-owned and domestic firms along the supply chain not captured by commonly used measures of spillovers. This includes evidence of productivity gains through forward linkages for domestic firms which receive inputs from foreign-owned firms.

U2 - 10.1016/j.euroecorev.2015.02.005

DO - 10.1016/j.euroecorev.2015.02.005

M3 - Journal article

SN - 0014-2921

VL - 76

SP - 168

EP - 187

JO - European Economic Review

JF - European Economic Review

ER -