Firm-Level Productivity Spillovers from FDI in Latin American Countries

Publikations-Art

Arbeitspapier/Diskussionspapier

Autoren

Henning Mühlen

Erscheinungsjahr

2013

Veröffentlicht in

IEE Working Paper Series

Herausgeber

Institute of Development Research and Development Policy at the Ruhr-Universität Bochum

ISBN / ISSN / eISSN

978-3-927276-82-6

<p><span style="display: inline;">Foreign direct investment (FDI) projects are assumed to be accompanied by potential external effects &ndash; so-called FDI spillovers &ndash; which are supposed to affect productivity levels of other firms in a host country. Empirical results on this topic are inconclusive and most studies focus on one country. I contribute to the literature by employing comparable firm-level panel data from ten Latin American (developing) countries in order to estimate the spillover effects from FDI on firms&rsquo; productivity levels. The impact is assessed as an average effect for the full set of countries as well as for each economy separately. The results indicate that there is a small negative spillover effect from foreign presence within industries across Latin American countries. Furthermore, I find that the negative intra-industry spillover is caused by wholly owned foreign affiliates. The country-specific investigation indicates that the spillover effects differ between the considered economies with a tendency that the presence of FDI in a sector (region) has a negative (positive) impact.</span></p>