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The purpose of this paper is two‐fold: to discuss the key factors determining foreign direct investment (FDI) intra‐industry spillovers and to examine the presence and the extent of these spillovers in Switzerland, by testing them for the services/construction industry, where there is currently a scarcity of evidence.

The assessment of spillovers calls for a detailed analysis of these effects according to the mechanisms by which they occur (namely, the increase in competition, demonstration effects, and worker mobility), and whether the size and the extent of spillovers depend on the interaction between their mechanisms and the existing technological capacities of domestic firms.

The regression results are affirmative, in that domestic firms with high technological capacities appear to gain spillover benefits from FDI heightening competition, while mid‐ and low‐technology firms benefit a lot from demonstration effects. In addition, spillovers for high‐ and mid‐technology firms appear to be largely co‐determined by the level of their human capital. Only domestic firms that invested heavily in absorptive capacity benefit from spillovers.

The evidence on spillover effects has not yet been conclusive. Hence, this paper proposes some components for a research agenda on FDI and intra‐industry spillovers.

The study provides insights for Swiss policy makers about how to promote the beneficial spillover effects of FDI.

The process of spilling over is correctly described in a more satisfactory model and then the impact of this process is accurately identified.

This study aims to investigate the relationship between entrepreneurship and innovation efficiency (IE), as well as the moderating role of absorptive capacity.

This study uses a sample of industrial enterprises from Chinese provinces from 2005 to 2016, and it tests the research questions using the method of stochastic frontier analysis.

The results of this study indicate that entrepreneurship promotes IE, and that absorptive capacity plays a positive moderating role. In addition, the effect of entrepreneurship on IE differs between the central and eastern regions and the western region.

This research provides direct policy implications by demonstrating the role of entrepreneurship and absorptive capacity in IE, thereby guiding corporate management practices and the formulation of government innovation and entrepreneurship policies.

The purpose of the study is to examine the moderating impact of absorptive capacity on the foreign direct investment (FDI)–growth link using the data for the period 1995–2019.

The authors apply the autoregressive distributed lag (ARDL) model and threshold analysis for empirical analysis.

The findings indicate that the link between FDI and economic growth is influenced indirectly by absorptive capacities, such as financial development, institutional quality, technological capability, and trade openness. However, while examining the linear FDI–growth nexus, the authors noticed that human capital and infrastructure did not affect the relationship; when the non-linearity in the link is considered, the authors noted that all absorptive capacities (including human capital and infrastructure), when interacted with FDI, have a positive effect on growth. Furthermore, FDI stimulates growth if the absorptive capacities have exceeded a certain threshold level.

From a practical standpoint, it is reasonable to conclude that improving absorptive capacities is critical in order to perceive FDI as a growth driver.

India has been able to position itself as a preferred destination for FDI (when the major economies are facing a sharp decline in FDI inflows) despite the Covid-19 pandemic. However, it still suffers from low growth. Although much of the literature admits that absorptive capacity is crucial for FDI to promote growth, no study in the case of India examines FDI–growth nexus conditioned upon absorptive capacity. Moreover, the authors have used threshold analysis for assessing the non-linearities in FDI–growth nexus contingent on absorptive capacity.

The purpose of this paper is to estimate the direct effects of foreign direct investment (FDI) on domestic target firms’ profitability gains, in India, post-acquisition. In particular, it focuses on identifying the importance of firms’ heterogeneities on the effects, taking into account the source of FDI, the intensity of firm interaction, and the target firms’ technology-absorptive capacity. Most importantly, the paper investigates whether the estimates depend on a combined rather than single impact of these heterogeneities.

To control for the possibility of selection bias and endogeneity, this empirical analysis uses a methodology that combines propensity score matching and difference-in-differences (PSM–DID) in adopting a comprehensive data set of both foreign- and Indian-acquired firms that were purchased through mergers and acquisitions in India between 1991 and 2013.

The analysis reveals four major findings. First, overall, the post-foreign acquisition target firms’ performance gains were positive and varied by the heterogeneous technology transfer capacity of the foreign investor. Second, it is possible that target firms located in industrial clusters with more foreign agglomeration experienced larger profitability gains through more dynamic firm interactions in terms of spillovers. Third, Indian targets with higher technology-absorptive capacity benefitted in higher profitability gains from acquiring and assimilating the superior technology that is transferred from foreign investors. Finally, an optimal combination of Indian target firms with higher technology-absorptive capacity and foreign investors with higher technology transfer capacity maximizes profitability gains, post-acquisition. This synergy effect is particularly prominent in clusters where more foreign firms agglomerate.

This study captures the true direct effect of FDI by adjusting the combined causal effects of various inherent heterogeneities in the target firms’ performance, thus correcting any possible bias, which few previous studies have addressed.

The authors propose a strategic-balance approach to local content laws in which less developed economies in sub-Sahara Africa can develop investment incentive policies for attracting multinationals and direct foreign investment but, at the same time, have a structured and operational framework for the enforcement of local content laws. The purpose of the paper is to identify the elements involved in the equation: the incentives, the potential spillovers and the criteria for evaluation.

The approach involves a review of the literature and the operational details and limitations of local content laws in sub-Sahara Africa.

The paper develops a conceptual model for a holistic understanding and management of this dilemma by policymakers and development practitioners to maximize the benefits of natural resources to less developed countries in sub-Sahara Africa towards the fight against poverty and underdevelopment.

This paper provides the opportunity to influence policy direction in relation to the adoption of investment incentive policies and programs and the enforcement of local content policy guidelines and regulations in sub-Sahara Africa.

Multinational companies (MNCs) operating in less developed and emerging economies in sub-Sahara Africa should consider how their economic and corporate social responsibility activities can help develop the capabilities of the local workforce through training and development activities; develop domestic firms’ capabilities via enterprise development programs; and develop local firm’s absorptive capacities through knowledge transfers and innovation systems to support development activities.

Policymakers in less developed and emerging economies in sub-Sahara Africa need to strike a balance in adopting investment incentives policies towards attracting foreign investments and the enforcement of local content regulations to make sure they derive the maximum benefits from their strategic resources. It is important for policymakers to understand that the mere attraction of MNCs into an economy does not explicitly guarantee domestic job creation; rather, it depends on how MNCs respond to local content policy regulations through their business strategies. Linking investment incentives with local content policy regulations at a critical point could potentially support and strengthen industrial development in sub-Sahara Africa.

This paper is among the first to examine the challenges of both attracting foreign direct investment and enforcing local content laws and regulations in sub-Sahara Africa. This paper contributes to the understanding of this dilemma and how less developed economies can manage such a crucial and important issue using our proposed strategic-balance approach. The contribution of local content laws and the design and adoption of investment incentives policies and programs to attract foreign investment to promoting sustainable domestic growth and development must depend on the balance between the enforcement of local content policy guidelines and the provision of such investment incentive packages to attracting foreign investment.

The purpose of this paper is to investigate the relationship between FDI and economic growth. Two models have been used to analyse the time series data on Pakistan from 1970 to 2012. This paper contributes to the existing literature by examining the different empirical methods to estimate the relationship between FDI and economic growth. The vector error correction model (VECM) results suggest that FDI depends on the economic growth but this relationship is not true vice versa. The second model showed that FDI, human capital and exports are important factors of economic growth. However, the negative relationship between interactive variables (FDI and human capital) and economic growth indicates that low level of human capital affect the economic growth of Pakistan.

Used time series data (1970-2012) for empirical analysis.

The VECM results suggest that FDI depends on the economic growth but this relationship is not true vice versa. The second model showed that FDI, human capital and exports are important factors of economic growth. However, the negative relationship between interactive variables (FDI and human capital) and economic growth indicates that low level of human capital affect the economic growth of Pakistan.

The limitations of this empirical paper are as follows: it would be better to use secondary school enrolment (per cent) to measure human capital instead adult literacy rate. Similarly, the non-availability of R & D data on Pakistan limited the scope of the paper to measure the role of absorptive capacity of domestic and its relationship with FDI. The results of this paper are specifically related to Pakistan and cannot be generalized to other countries.

This empirical study implies that Pakistan should improve its economic growth. The robust policies are required to increase the literacy rate of the country. Higher human capital will attract more FDI into the economy and may reduce the unemployment. This would increase the national output of the country and their national income level. Presently, Pakistan is going through war on terror and foreign firms are reluctant to invest. A stable and secure business environment will ultimately inject foreign direct investment into Pakistan.

This paper is first time analyse the time series data to explore the relationship between FDI and economic growth. A new approach has been used called VECM.

The threshold regression framework is used to examine the effect of foreign direct investment on growth in Sub-Saharan Africa (SSA). The growth literature is awash with divergent evidence on the role of foreign direct investment (FDI) on economic growth. Although the FDI–growth nexus has been studied in diverse ways, very few studies have examined the relationship within the framework of threshold analysis. Furthermore, even where this framework has been adopted, none of the previous studies has comprehensively examined the FDI–growth nexus in the broader SSA. In this paper, within the standard panel and threshold regression framework, the problem of determining the growth impact of FDI is revisited.

Six variables are used as thresholds – inflation, initial income, population growth, trade openness, financial market development and human capital, and the analysis is based on a large panel data set that comprises 45 SSA countries for the years 1985–2013.

The results of this study show that the direct impact of FDI on growth is largely ambiguous and inconsistent. However, under the threshold analysis, it is evident that FDI accelerates economic growth when SSA countries have achieved certain threshold levels of inflation, population growth and financial markets development. This evidence is largely invariant qualitatively and is robust to different empirical specifications. FDI enhances growth in SSA when inflation and private sector credit are below their threshold levels while human capital and population growth are above their threshold levels.

The contribution of this paper is twofold. First, the paper streamlines the threshold analysis of FDI–growth nexus to focus on countries in SSA – previous studies on FDI-growth nexus in SSA are country-specific and time series–based (see Tshepo, 2014; Raheem and Oyınlola, 2013 and Bende-Nabende, 2002). This paper provides a panel analysis and considers a broader set of up to 45 SSA countries. Such a broad set of SSA countries had never been considered in the literature. Second, the paper expands on available threshold variables to include two new important macroeconomic variables, population growth and inflation which, though are important absorptive capacities but, until now, had not been used as thresholds in the FDI–growth literature. The rationale for including these variables as thresholds stems from the evidence of an empirical relationship between population growth and economic growth, see Darrat and Al-Yousif (1999), and between inflation and economic growth, see Kremer et al. (2013).

Whether foreign direct investment (FDI) can promote technology progress in the host country, or not, has become an issue in recent decades. The purpose of this paper is to analyze the impact of FDI on regional technological capabilities.

This paper first analyzes the spillover effects of FDI with reference to actual conditions in foreign‐funded enterprises in China, then uses correlation analysis and regression analysis to show the impact of FDI on technological capabilities. This paper compares the R&D expenditures in foreign‐funded enterprises and FDI origin countries between three typical regions – Shanghai, Jiangsu, and Guangdong – to show the influencing factors of spillovers.

The impact of FDI on regional technological capabilities is found to be weak; FDI has little use for enhancing indigenous innovation capability. The regions with higher technological capabilities will attract the higher quality of inward FDI, and the powerful technological capabilities and abundant human capitals in domestic enterprises are essential factors to stimulate the spillover effects of FDI.

The arguments could be discussed more fully if an empirical model could be established to disclose the determinants of spillover effects. How to measure the spillover effects quantitatively is a key problem for future research.

This paper discloses the mutual relationship between domestic and foreign‐funded enterprises. The findings in this paper provide some insights for both the host countries and the foreign investors.

The purpose of this paper is to determine the relative importance of deliberate learning, learning from experience and relevant learning co-variates in pursuing market learning, and to assess the impact of market learning on export performance in smaller firms.

A theoretical model was initially developed and subsequently tested using survey data. The standard two step approach of first testing the measurement model and then estimating the structural model was adopted.

The results provide concrete evidence that among SMEs, deliberate learning has a greater impact on export market learning as compared to experience accumulation, and that market learning has a significant effect on export performance. The results also show that absorptive capacity and commitment to learning are significant co-variates of market learning.

This paper focuses on the role of deliberate learning vis-a-vis learning by experience in achieving foreign market learning and export performance in smaller firms. It addresses a major limitation of organisational learning studies which tend to focus mainly on experiential learning and organisational learning in large organisations.

This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and domestic firms.

The study is based on firm-level panel data from a census of Colombian manufacturing firms for the period 2003–2012. The estimation procedure involves two stages. In the first one, total factor productivity (TFP) of foreign and domestic firms is estimated. In a second step, we estimate conventional spillovers (from foreign-owned to local firms) and reverse spillovers (from local to foreign-owned firms) separately, using a random effect approach.

This study’s findings reveal that only locally creative subsidiaries enjoy positive and significant two-way knowledge spillover effects. The connectivity of subsidiaries to local and international networks is reinforced by reciprocal relationships among actors that enhance bidirectional knowledge flows, these being favored by the dynamics of clustering effects.

The paper contributes with new empirical evidence about the mechanism explaining how the technological heterogeneity of subsidiaries plays a determinant role in the generation of both knowledge flows from foreign to domestic firms and to the reverse, all integrated into the same framework.