Exporting, Linkages and Productivity Spillovers from Foreign Direct Investment
32 Pages Posted: 29 May 2008
Date Written: July 2007
In this paper we analyse productivity spillovers from foreign direct investment using firm level panel data UK manufacturing industries from 1992 to 1999. We investigate spillovers through horizontal, backward and forward linkages, distinguish spillovers from export oriented vs domestic market oriented FDI, and allow for differing effects depending on domestic firms' export activities. The results suggest that the mechanisms through which spillovers affect domestic firms are very complex and that there are substantial differences in spillover benefits for domestic exporters and non-exporters, and from different types of inward investment.
Keywords: Absorptive capacity, exporting, foreign direct investment, linkages, productivity spillovers
JEL Classification: F1, F2
Suggested Citation: Suggested Citation