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Foreign direct investment and technology spillovers: Which firms really benefit?

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Abstract

Foreign direct investment is thought to contribute to host economies by increasing their efficiency either directly or through technology diffusion. Such efficiency benefits are neither equally produced by foreign firms nor equally distributed to all domestic firms. The special question addressed in this study is related to how differentiated such effects are depending on size and degree of (foreign) ownership. Based on a sample of 3,742 manufacturing firms operating in Greece in 1997, it is found that, while it is large, majority-held foreign firms that exhibit higher productivity, spillovers are important for small domestic firms and stem mostly from small joint ventures where the foreign partner owns a minor part of equity. JEL no. F23, O30

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Authors and Affiliations

  1. Department of Informatics, Athens University of Economics and Business, 76 Patission Street, 10434, Athens

    Sophia Dimelis & Helen Louri

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  1. Sophia Dimelis
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  2. Helen Louri
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Correspondence to Sophia Dimelis.

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Dimelis, S., Louri, H. Foreign direct investment and technology spillovers: Which firms really benefit?. Rev. World Econ. 140, 230–253 (2004). https://doi.org/10.1007/BF02663647

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