Potential and Actual FDI Spillovers in Global Value Chains : The Role of Foreign Investor Characteristics, Absorptive Capacity and Transmission Channels

Using newly collected survey data on direct supplier-multinational linkages in Chile, Ghana, Kenya, Lesotho, Mozambique, Swaziland, and Vietnam, this paper first evaluates whether foreign investors differ from domestic producers in terms of their potential to generate positive spillovers for local suppliers. It finds that foreign firms outperform domestic producers on several indicators, but have fewer linkages with the local economy and offer less supplier assistance, resulting in offsetting effects on the spillover potential. The paper also studies the relationship between foreign investor characteristics and linkages with the local economy as well as assistance extended to local suppliers. It finds that foreign investor characteristics matter for both. The paper also examines the role of suppliers' absorptive capacities in determining the intensity of their linkages with multinationals. The results indicate that several supplier characteristics matter, but these effects also depend on the length of the supplier relationship. Finally, the paper assesses whether assistance or requirements from a multinational influence spillovers on suppliers. The results confirm the existence of positive effects of assistance (including technical audits, joint product development, and technology licensing) on foreign direct investment spillovers, while the analysis finds no evidence of demand effects.

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Bibliographic Details
Main Author: Winkler, Deborah
Language:English
en_US
Published: World Bank, Washington, DC 2013-04
Subjects:AUDITS, CATERING, COMPETITOR, DEVELOPING COUNTRIES, DIRECT FOREIGN INVESTMENT, DOMESTIC ECONOMY, DOMESTIC FIRM, DOMESTIC FIRMS, DOMESTIC MARKET, DOMESTIC SUPPLIER, DOMESTIC SUPPLIERS, ECONOMIC DEVELOPMENT, ECONOMIC POLICY, EMERGING MARKET, EMERGING MARKET ECONOMIES, EMPLOYMENT, EQUIPMENT, EXPORT MARKET, EXPORT SHARE, EXPORTERS, FDI, FIRM SIZE, FIRMS, FOREIGN AFFILIATES, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN FIRM, FOREIGN FIRMS, FOREIGN INVESTMENT, FOREIGN INVESTOR, FOREIGN INVESTORS, FOREIGN OWNERSHIP, FOREIGN TECHNOLOGY, FOREIGN-OWNED FIRMS, GLOBAL ECONOMY, HOME COUNTRIES, HOME COUNTRY, HOST COUNTRIES, HOST COUNTRY, HUMAN CAPITAL, INCOME, INDUSTRIAL DEVELOPMENT, INTER-FIRM LINKAGES, INTERNATIONAL BANK, INTERNATIONAL DEVELOPMENT, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, INVENTORY, INVESTMENT PROMOTION, JOINT VENTURES, KNOWLEDGE DIFFUSION, LEASING, LICENSING, LOCAL ECONOMY, LOCAL MARKET, LOW-INCOME COUNTRIES, MANUFACTURING FIRMS, MANUFACTURING SECTOR, MARKET FORCES, MARKET SEGMENTATION, MARKET SHARE, MEDIUM-SIZED FIRMS, MULTINATIONAL, MULTINATIONAL ENTERPRISES, MULTINATIONALS, NATURAL RESOURCES, NEW PRODUCTS, OPEN ECONOMIES, OUTPUT, POSITIVE COEFFICIENT, PRODUCT QUALITY, REGIONAL INTEGRATION, RETAIL, SALES, SKILLED WORKERS, SUBSTITUTE, SUPPLIER, SUPPLIERS, TAX, TECHNOLOGY DIFFUSION, TECHNOLOGY GAP, TECHNOLOGY GAPS, TECHNOLOGY INTENSITY, TECHNOLOGY SPILLOVERS, TECHNOLOGY TRANSFER, TOTAL SALES, TRANSITION COUNTRIES, TRANSITION ECONOMIES, TURNOVER, VERTICAL LINKAGES,
Online Access:http://documents.worldbank.org/curated/en/2013/04/17626325/potential-actual-fdi-spillovers-global-value-chains-role-foreign-investor-characteristics-absorptive-capacity-transmission-channels
https://hdl.handle.net/10986/15570
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