Title | Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms? |
Author | Jonathan Haskel, Mathew Slaughter, Sonia Pereira |
Year | 2005 |
Abstract | Are there productivity spillovers from FDI to domestic firms, and, if so, how much should host countries be willing to pay to attract FDI? To examine these questions we use a plant-level panel covering U.K. manufacturing from 1973 through 1992. Consistent with spillovers, we estimate a robust and significantly positive correlation between a domestic plant’s TFP and the foreign-affiliate share of activity in that plant’s industry. Typical estimates suggest that a 10 percentage-point increase in foreign presence in a U.K. industry raises the TFP of that industry’s domestic plants by about 0.5 percent. We also use these estimates to calculate the per-job value of these spillovers at about UK£2,400 in 2000 prices (US$4,300). These calculated values appear to be less than per-job incentives governments have granted in recent high-profile cases, in some cases several times less. |
DownloadInfo | PDF: Spillovers_26Nov05.pdf |
Remarks | Reference: Haskel, J., Pereira, S., and Slaughter, M., (2007), “Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?” Review of Economics and Statistics, Vol. 89, No. 3, pp.482-496. |
I | Attachment | Action | Size | Date | Who | Comment |
---|---|---|---|---|---|---|
![]() |
Spillovers_26Nov05.pdf | manage | 228.8 K | 25 Jan 2007 - 20:56 | JonathanHaskel |