TY  - JOUR
AU  - Haskel,Jonathan E.
AU  - Pereira,Sonia C.
AU  - Slaughter,Matthew J.
TI  - Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8724
PY  - 2002
Y2  - January 2002
UR  - http://www.nber.org/papers/w8724
L1  - http://www.nber.org/papers/w8724.pdf
N1  - Author contact info:
Matthew J. Slaughter
Tuck School of Business
Dartmouth College
100 Tuck Hall
Hanover, NH 03755
Tel: 603/646-2939
Fax: 603/646-0995
E-Mail: matthew.j.slaughter@dartmouth.edu
AB  - Are there productivity spillovers from FDI to domestic firms, and, if so, how much should host countries be willing to pay to attract FDI? To examine these questions we use a plant-level panel covering U.K. manufacturing from 1973 through 1992. Across a wide range of specifications, we estimate a significantly positive correlation between a domestic plant's TFP and the foreign-affiliate share of activity in that plant's industry. This is consistent with positive FDI spillovers. We do not generally find significant effects on plant TFP of the foreign-affiliate share of activity in that plant's region. Typical estimates suggest that a 10 percentage-point increase in foreign presence in a U.K. industry raises the TFP of that industry's domestic plants by about 0.5 percent. We also use these estimates to calculate the per-job value of these spillovers. These calculated values appear to be less than per-job incentives governments have granted in recent high-profile cases, in some cases several times less.
ER  -