Technology diffusion and host-country productivity in South-South FDI flows

Hyuk Hwang Kim; Hongshik Lee; Joonhyung Lee

doi:10.1016/j.japwor.2014.11.001

Technology diffusion and host-country productivity in South-South FDI flows

Hyuk Hwang Kim, Hongshik Lee, Joonhyung Lee

Research output: Contribution to journal › Article › peer-review

32 Citations (Scopus)

Abstract

This paper investigates the effects of foreign direct investment (FDI) on the host country's economic performance, namely, its total factor productivity (TFP). Such effects are often referred to as FDI externalities or spillover effects. In addition, the paper examines whether such spillover effects depend on the home country's income level. Our empirical findings indicate that FDI flows have positive effects on less developed countries (South countries), and that the effect of FDI flows from the developed countries (North countries) is stronger than that from less developed countries. That is, these results confirm the so-called North-South effects but provide no evidence of South-South effects. Furthermore, another channel of spillover effects is imports, which have significant effects on TFP.

Original language	English
Pages (from-to)	1-10
Number of pages	10
Journal	Japan and the World Economy
Volume	33
DOIs	https://doi.org/10.1016/j.japwor.2014.11.001
Publication status	Published - 2015 Feb 1

Bibliographical note

Funding Information:
We thank Akiko Terada-Hagiwara, Peter Morgan, Douglas H. Brooks, and Joseph E. Zveglich for their helpful suggestions, and the anonymous referees and the participants at the Asian Development Bank's Forum on South-South Economic Linkages for their valuable comments. This work was supported by the National Research Foundation of Korea Grant, and funded by the Korean Government ( NRF-2010-330-B00081 ) and the Asian Development Bank . All remaining errors are our own.

Publisher Copyright:
© 2014 Elsevier B.V.

Keywords

FDI
South-South
Technology spillover
Total factor productivity (TFP)

ASJC Scopus subject areas

Finance
Economics and Econometrics
Political Science and International Relations

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.japwor.2014.11.001

Cite this

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abstract = "This paper investigates the effects of foreign direct investment (FDI) on the host country's economic performance, namely, its total factor productivity (TFP). Such effects are often referred to as FDI externalities or spillover effects. In addition, the paper examines whether such spillover effects depend on the home country's income level. Our empirical findings indicate that FDI flows have positive effects on less developed countries (South countries), and that the effect of FDI flows from the developed countries (North countries) is stronger than that from less developed countries. That is, these results confirm the so-called North-South effects but provide no evidence of South-South effects. Furthermore, another channel of spillover effects is imports, which have significant effects on TFP.",

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AU - Lee, Joonhyung

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N2 - This paper investigates the effects of foreign direct investment (FDI) on the host country's economic performance, namely, its total factor productivity (TFP). Such effects are often referred to as FDI externalities or spillover effects. In addition, the paper examines whether such spillover effects depend on the home country's income level. Our empirical findings indicate that FDI flows have positive effects on less developed countries (South countries), and that the effect of FDI flows from the developed countries (North countries) is stronger than that from less developed countries. That is, these results confirm the so-called North-South effects but provide no evidence of South-South effects. Furthermore, another channel of spillover effects is imports, which have significant effects on TFP.

AB - This paper investigates the effects of foreign direct investment (FDI) on the host country's economic performance, namely, its total factor productivity (TFP). Such effects are often referred to as FDI externalities or spillover effects. In addition, the paper examines whether such spillover effects depend on the home country's income level. Our empirical findings indicate that FDI flows have positive effects on less developed countries (South countries), and that the effect of FDI flows from the developed countries (North countries) is stronger than that from less developed countries. That is, these results confirm the so-called North-South effects but provide no evidence of South-South effects. Furthermore, another channel of spillover effects is imports, which have significant effects on TFP.

KW - FDI

KW - South-South

KW - Technology spillover

KW - Total factor productivity (TFP)

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SN - 0922-1425

VL - 33

SP - 1

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JO - Japan and the World Economy

JF - Japan and the World Economy

ER -

Technology diffusion and host-country productivity in South-South FDI flows

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

Access to Document

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