1887

OECD Journal: Economic Studies

  • Discontinued

OECD Journal: Economic Studies publishes articles in the area of economic policy analysis, applied economics and statistical analysis, generally with an international or cross-country dimension. It draws significantly on economic papers produced by the OECD Economics Department, other parts of the OECD Secretariat and the Organisation’s intergovernmental committees.

English

Foreign direct investment and reverse technology spillovers

The effect on total factor productivity

The paper analyses the “feedback effect” of Foreign Direct Investment (FDI) on Total Factor Productivity (TFP) growth in emerging economies via technology spillovers across borders. We study the effect of R–D spillovers resulting from outward FDI flows from 18 emerging economies into 34 OECD countries over the 1990-2010 period, comparing the impact with that of spillovers resulting from inward FDI flows. The result confirms that FDI enhances productivity growth; however the impact is much larger when R-D-intensive developed countries invest in the emerging economies than the other way round. Country-specific bilateral elasticities also support this outcome.

JEL classification: F210, F430, F620, O470.

Keywords: Outward FDI, Inward FDI, Reverse technology spillovers, Total factor productivity.

English

JEL: O47: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence; F43: International Economics / Macroeconomic Aspects of International Trade and Finance / Economic Growth of Open Economies; F62: International Economics / Economic Impacts of Globalization / Economic Impacts of Globalization: Macroeconomic Impacts; F21: International Economics / International Factor Movements and International Business / International Investment; Long-term Capital Movements
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