Foreign Direct Investment and Productivity Spillovers: Firm-Level Evidence From Chilean Industrial Sector |
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Authors: | Leopoldo Laborda Castillo Daniel Sotelsek Salem Justo de Jorge Moreno |
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Institution: | 1. World Bank and Institute of Latin American Studies , University of Alcalá, Madrid , Spain llabordacastillo@gmail.com;3. Institute of Latin American Studies, University of Alcalá , Madrid , Spain |
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Abstract: | Using firm-level panel data, this article examines whether spillovers from foreign direct investment (FDI) make a contribution to productivity growth in Chilean manufacturing firms. The main contribution of this work is to apply a methodology to estimate, in a consistent manner, the productivity impact of investment climate variables, such as FDI. With this aim, the spillover effects from FDI are analyzed using a stochastic frontier approach (SFA). Productivity growth is decomposed using a generalized Malmquist output-oriented index. The results show positive productivity spillovers from FDI; higher competition is associated with larger spillovers; and firms with high R&D effort gain more spillover benefits compared to those with less R&D effort. |
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Keywords: | foreign direct investment industrial sector Malmquist index productivity spillovers |
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