To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment?
This paper examines whether the degree of spillovers from foreign direct investment is affected by the foreign ownership share in investment projects. The analysis, based on an unbalanced panel of Romanian firms from 1998-2000, provides evidence co...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/08/2503684/share-or-not-share-local-participation-matter-spillovers-foreign-direct-investment http://hdl.handle.net/10986/18136 |
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okr-10986-181362021-04-23T14:03:41Z To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? Javorcik, Beata Smarzynska Spatareanu, Mariana ACCOUNTING AFFILIATES AVERAGE COSTS COMPARATIVE ANALYSIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS ECONOMIC REVIEW ECONOMIC SECTORS ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EXPORTS EXPROPRIATION EXTERNALITIES FIXED ASSETS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN OWNERSHIP GDP GDP DEFLATOR HUMAN CAPITAL IMPORTS INTERMEDIATE INPUTS INVESTMENT EXPENDITURES LABOR PRODUCTIVITY MERGERS NEGATIVE EXTERNALITIES OIL OWNERSHIP STRUCTURE POLICY RESEARCH POLITICAL ECONOMY POSITIVE EFFECTS POSITIVE EXTERNALITIES POSITIVE SPILLOVERS PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVITY PRODUCTIVITY GROWTH SCALE ECONOMIES SPILLOVERS STATEMENTS SUBSIDIARIES SUBSIDIARY TECHNOLOGY TRANSFERS TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMIES VALUE ADDED VARIABLE INPUTS SPILLOVER EFFECTS This paper examines whether the degree of spillovers from foreign direct investment is affected by the foreign ownership share in investment projects. The analysis, based on an unbalanced panel of Romanian firms from 1998-2000, provides evidence consistent with positive intra-sectoral spillovers resulting from fully-owned foreign affiliates but not from projects with joint domestic and foreign ownership. This finding is consistent with literature suggesting that foreign investors tend to put more resources into technology transfer to their wholly-owned projects than to those owned partially. The data also indicate that the presence of partially foreign-owned projects is correlated with higher productivity of domestic firms in upstream industries, suggesting that domestic suppliers benefit from contacts with multinational customers. But the opposite is true for fully-owned foreign affiliates, which appear to have a negative effect on domestic firms in upstream industries. These results are consistent with the observation that foreign investors entering a host country through greenfield projects are less likely to source locally than those engaged in joint ventures or partial acquisitions. They are also in line with the evidence suggesting that fully-owned foreign subsidiaries use newer or more sophisticated technologies than jointly-owned investment projects, and thus may have higher requirements which only a few, if any, domestic suppliers are able to meet. 2014-05-01T20:32:22Z 2014-05-01T20:32:22Z 2003-08 http://documents.worldbank.org/curated/en/2003/08/2503684/share-or-not-share-local-participation-matter-spillovers-foreign-direct-investment http://hdl.handle.net/10986/18136 English en_US Policy Research Working Paper;No. 3118 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AFFILIATES AVERAGE COSTS COMPARATIVE ANALYSIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS ECONOMIC REVIEW ECONOMIC SECTORS ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EXPORTS EXPROPRIATION EXTERNALITIES FIXED ASSETS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN OWNERSHIP GDP GDP DEFLATOR HUMAN CAPITAL IMPORTS INTERMEDIATE INPUTS INVESTMENT EXPENDITURES LABOR PRODUCTIVITY MERGERS NEGATIVE EXTERNALITIES OIL OWNERSHIP STRUCTURE POLICY RESEARCH POLITICAL ECONOMY POSITIVE EFFECTS POSITIVE EXTERNALITIES POSITIVE SPILLOVERS PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVITY PRODUCTIVITY GROWTH SCALE ECONOMIES SPILLOVERS STATEMENTS SUBSIDIARIES SUBSIDIARY TECHNOLOGY TRANSFERS TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMIES VALUE ADDED VARIABLE INPUTS SPILLOVER EFFECTS |
| spellingShingle |
ACCOUNTING AFFILIATES AVERAGE COSTS COMPARATIVE ANALYSIS DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS ECONOMIC REVIEW ECONOMIC SECTORS ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EXPORTS EXPROPRIATION EXTERNALITIES FIXED ASSETS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN OWNERSHIP GDP GDP DEFLATOR HUMAN CAPITAL IMPORTS INTERMEDIATE INPUTS INVESTMENT EXPENDITURES LABOR PRODUCTIVITY MERGERS NEGATIVE EXTERNALITIES OIL OWNERSHIP STRUCTURE POLICY RESEARCH POLITICAL ECONOMY POSITIVE EFFECTS POSITIVE EXTERNALITIES POSITIVE SPILLOVERS PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVITY PRODUCTIVITY GROWTH SCALE ECONOMIES SPILLOVERS STATEMENTS SUBSIDIARIES SUBSIDIARY TECHNOLOGY TRANSFERS TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMIES VALUE ADDED VARIABLE INPUTS SPILLOVER EFFECTS Javorcik, Beata Smarzynska Spatareanu, Mariana To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| relation |
Policy Research Working Paper;No. 3118 |
| description |
This paper examines whether the degree
of spillovers from foreign direct investment is affected by
the foreign ownership share in investment projects. The
analysis, based on an unbalanced panel of Romanian firms
from 1998-2000, provides evidence consistent with positive
intra-sectoral spillovers resulting from fully-owned foreign
affiliates but not from projects with joint domestic and
foreign ownership. This finding is consistent with
literature suggesting that foreign investors tend to put
more resources into technology transfer to their
wholly-owned projects than to those owned partially. The
data also indicate that the presence of partially
foreign-owned projects is correlated with higher
productivity of domestic firms in upstream industries,
suggesting that domestic suppliers benefit from contacts
with multinational customers. But the opposite is true for
fully-owned foreign affiliates, which appear to have a
negative effect on domestic firms in upstream industries.
These results are consistent with the observation that
foreign investors entering a host country through greenfield
projects are less likely to source locally than those
engaged in joint ventures or partial acquisitions. They are
also in line with the evidence suggesting that fully-owned
foreign subsidiaries use newer or more sophisticated
technologies than jointly-owned investment projects, and
thus may have higher requirements which only a few, if any,
domestic suppliers are able to meet. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Javorcik, Beata Smarzynska Spatareanu, Mariana |
| author_facet |
Javorcik, Beata Smarzynska Spatareanu, Mariana |
| author_sort |
Javorcik, Beata Smarzynska |
| title |
To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| title_short |
To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| title_full |
To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| title_fullStr |
To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| title_full_unstemmed |
To Share or Not to Share : Does Local Participation Matter for Spillovers from Foreign Direct Investment? |
| title_sort |
to share or not to share : does local participation matter for spillovers from foreign direct investment? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/08/2503684/share-or-not-share-local-participation-matter-spillovers-foreign-direct-investment http://hdl.handle.net/10986/18136 |
| _version_ |
1764438955324866560 |