This paper aims to conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities.
This paper proposes a new methodological framework that allows country- and firm-level effects to be combined. The authors hand collected information from 175 studies and around 1,100 estimates in Eastern Europe, Asia, Latin America and Africa from 1940 to 2008.
The two main findings indicate that “macro” effects are much larger than enterprise-level ones, by a factor of at least six and the benefits from foreign direct investment (FDI) into emerging economies are substantially less “conditional” than commonly thought.
The empirical literature has not reached a conclusion as to whether FDI yields spillovers when the host economies are emerging. Instead, the results are often viewed as conditional. For macro studies, this means that the existence and scale of spillover effects are contingent on the levels of institutional, financial or human capital development attained by the host economies. For enterprise-level studies, conditionality relates to the type of inter-firm linkages, namely, forwards, backwards or horizontal.
The authors are grateful to Paulo Correa, Giacomo De Giorgi, Nigel Driffield, Chris Doucouliagos, Paul Healey, Julian Higgings, Mariana Iootty, Liza Jabbour, Stephen Jarrell, Yuko Kinoshita, Jim Love, Oliver Morrissey, Gaia Narciso, Nigel Miller, Michele Pellizzari, John Piper, Tom Stanley, Alan Winters and seminar participants at DFID, Annual MAER-Net Conference (University of Cambridge), the fRDB workshop (Bocconi University, Milan), DFID-Birmingham Business School FDI Workshop, Association for International Business Annual Conference (New Orleans) and Campbell Collaboration Colloquium (Copenhagen) for valuable comments on previous versions. The authors acknowledge generous financial support from the Department for International Development (DFID Systematic Reviews Programme) and thank Chiara Amini, Silvia Dal Bianco and Dustin Voss for excellent research assistance. The responsibility for all views expressed in this paper and all remaining errors is entirely theirs’.
Bruno, R., Campos, N. and Estrin, S. (2018), "Taking stock of firm-level and country-level benefits from foreign direct investment", Multinational Business Review, Vol. 26 No. 2, pp. 126-144. https://doi.org/10.1108/MBR-02-2018-0011Download as .RIS
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