What is the impact of foreign direct investment (FDI) on development? The answer is important for the lives of millions—if not billions—of workers, families, and communities in the developing world. The answer is crucial for policymakers in developing and developed countries, and in multilateral agencies. This volume gathers together the cutting edge of new research on FDI and host country economic performance and presents the most sophisticated critiques of current and past inquiries. It probes the limits of what can be determined from available evidence and from innovative investigative techniques. In addition, the book presents new results, concludes with an analysis of the implications for contemporary policy debates, and proposes new avenues for future research.
- Cover
- Contents
- Preface
- Chapter 1 Introduction and Overview
- Finding an Empirical Framework for Policy Analysis
- New Methodologies and New Results in Measuring FDI's Impact on Development: Searching for Externalities and Spillovers
- Aggregate Assessment of FDI’s Impact on Host Country Growth
- Designing Policies to Capture Beneficial (and Avoid Harmful) Economic Impacts of FDI
- Chapter 2 The Impact of Inward FDI on Host Countries: Why Such Different Answers?
- Wage Spillovers
- Productivity Spillovers
- Productivity Spillovers in Indonesia
- Conclusions
- Chapter 3 Disentangling FDI Spillover Effects: What Do Firm Perceptions Tell Us?
- A Tale of Two Countries and Two Spillover Patterns
- Dissecting Horizontal Spillovers
- How Do Vertical Spillovers Work?
- Further Complications—Do Characteristics of FDI Projects Affect Spillovers?
- Conclusions
- Chapter 4 Foreign Direct Investment and Externalities: The Case for Public Intervention
- Technology Spillover from FDI
- Liquidity Insurance from FDI
- Conceptual Framework of Technology Transfer from FDI
- Conceptual Framework for FDI and Liquidity Insurance
- Theories
- Indonesian Manufacturing and Foreign Investment Policy
- Data
- Productivity Effects of FDI
- Market and Welfare Effects
- Liquidity Insurance from FDI
- Summary and Implications
- Chapter 5 R&D Activities of Foreign and National Establishments in Turkish Manufacturing
- Background and Literature Review
- Turkey’s R&D Trends and Policies
- Data
- Research Questions
- Methodology, Model, and Hypotheses
- Empirical Results
- Summary and Conclusions
- Linkages
- Chapter 6 Foreign Direct Investment and Local Economic Development: Beyond Productivity Spillovers
- Productivity Spillovers
- Multinational Effect on Domestic Plant Entry
- Plant Survival
- Multinational Effect on Plant Growth
- Conclusions
- Chapter 7 Multinational Firms and Backward Linkages: A Critical Survey and a Simple Model
- Existing Analytical Work on Linkages
- A Research Agenda
- Model
- Autarky
- Multinational’s Entry into the Market
- Multinational’s Effect on Backward Linkages
- Vertical Technology Transfer
- Conclusion
- Comment: Gordon H. Hanson
- Comment: Michael P. Keane
- Chapter 8 Does Foreign Direct Investment Accelerate Economic Growth?
- Econometric Framework
- Data
- Results
- Conclusion
- Chapter 9 Inappropriate Pooling of Wealthy and Poor Countries in Empirical FDI Studies
- Descriptive Differences in FDI Patterns for DCs Versus LDCs
- Estimating Determinants of FDI
- FDI and Growth
- FDI and Domestic Investment: Crowding In or Out?
- Conclusion
- Chapter 10 Intrafirm Trade of US MNCs: Findings and Implications for Models and Policies Toward Trade and Investment
- Data
- Empirical Results
- Discussion of Results
- Conclusion
- Comment: Marc J. Melitz
- Chapter 11 How Does FDI Affect Host Country Development? Using Industry Case Studies to Make Reliable Generalizations
- Initial Answers from a Limited Number of Case Studies
- Avoiding Selection Bias and Allowing Generalization from Country and Industry Case Studies
- Why Have Other Studies Not Come to the Same Conclusions?
- Implications for Further Research
- Chapter 12 China’s Policies on FDI: Review and Evaluation
- The Evolution of FDI in China
- China’s FDI Policies
- Export Performance Requirement Policies’ Influence on FDI
- FDI’s Contribution to Advancing China’s Technological Capability
- Conclusion
- Chapter 13 Is Africa’s Skepticism of Foreign Capital Justified? Evidence from East African Firm Survey Data
- Foreign Investment in Sub-Saharan Africa
- African Barriers to FDI
- Background: Foreign Investment in East Africa
- African Skepticism Toward Foreign Investment
- Foreign Investment in East Africa: New Results from Firm Surveys
- Factors Determining Foreign Ownership: A Simple Econometric Test
- Conclusion
- Comment: Robert Z. Lawrence
- Chapter 14 Conclusions and Implications for FDI Policy in Developing Countries, New Methods of Research, and a Future Research Agenda
- Implications for Policy Toward FDI
- Implications for Future Research Methodology
- Priority Areas for Further Research
- About the Contributors
- Index
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