Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis

Authors


  • The authors are grateful for constructive comments by seminar participants from the Department of Economics at the University of Arkansas and participants at the “WTO, China, and the Asian Economies, IV” conference in Beijing, China (2006).

Wooster: Portland State University, PO Box 751, Portland, OR 97207, USA. Tel: (503) 725-3944; Fax: (503) 725-3945; E-mail: wooster@pdx.edu. Diebel: Economist, ADM Associates, Inc., 3239 Ramos Circle, Sacramento, CA 95827-2501, USA. Tel: (916) 363-8383; Fax: (916) 363-1788; E-mail: david@admenergy.com.

Abstract

This paper reviews the empirical literature on technology spillovers from foreign direct investment (FDI) in developing countries. Our meta-analysis uses a sample of 32 studies to determine what aspects of study design and data characteristics explain the magnitude, significance, and direction of spillovers from FDI. Results suggest that spillover effects are more pronounced when studies measure the effect of FDI spillovers on output, and are more likely to be significant and positive for Asian countries. Results also highlight the possibility that the documented spillover effects from FDI in developing countries may be partly a product of model misspecification.

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