Technology transfer through vertical linkages: The case of the Spanish manufacturing industry

Whether or not foreign direct investment helps to upgrade the technological capacities of firms in host countries is an important question for policy makers. Even more important is the question of what are the most effective channels of technology transfer. The econometric analysis presented here is based on a firm level database from Spain for the period 1990-2000. We associate spillovers with the effect of horizontal and vertical FDI on total factor productivity of local firms. We find that technology spillovers are limited to the case of vertical linkages. However these spillovers are affected by the technology gap between domestic firms and foreign affiliates as well as by the characteristics of foreign affiliates. Linkages with exportoriented affiliates and fully owned ones seem to have a better influence on the productivity of domestic firms.technology spillovers, vertical linkages, foreign direct investment

Public governance as a key determinant of FDI : a comparative analysis of sub-saharan Africa and south-east Asia host countries

The World Bank (2000), in its report on Quality of Growth emphasises the importance of public governance as the keystone of a country's development. Studies examining determinants of foreign direct investment (FDI) are also increasingly taking account of such fundamentals as institutional and political factors. Thus, rule of law, bureaucratic corruption, educational attainment or quality of physical infrastructure are now included in econometric analyses next to more common variables such as market size, labour costs or trade openness. In other words, good governance appears to be a key condition for attracting FDI. For instance, Lehmann (1999), shows that a country like India could increase its share of US affiliates' physical investment by 50% if it were to eliminate all political uncertainty. For a developing country, the stakes for improving its public governance are high. Beyond an increase in its growth rate, a favourable business climate is likely to attract more FDI and enhance their alleged spillovers. More FDI means more financial resources for the host country, whereas it is likely that the technological intensity of these investments and the transfer of foreign know-how to domestic firms will largely depend on the quality of public governance. This article has three goals. First, to clarify why public governance is likely to influence FDI inflows. Second, to propose a new evaluation of public governance through the construction of quantitative, relatively objective, easily replicable and sample-specific indicators. The public governance of two geographic zones will be assessed through this method: Sub-Saharan Africa (SSA) and South-East Asia (SEA). As shown in table 1.1, the former attracts much less FDI than the latter. Third, to test econometrically whether public governance explains the diverging abilities of SSA and SEA to attract FDI

localisation à l'étranger des entreprises multinationales.

La décision de localisation d'une entreprise multinationale peut être décrite comme une séquence de choix géographiques dans laquelle l'entreprise choisit d'abord un pays puis une région à l'intérieur de ce pays. Cette séquence de choix est confirmée par l'analyse du comportement des entreprises japonaises en Europe. La structure géographique du choix est prise en compte en séparant les déterminants du choix national et ceux du choix infra-national. Les entreprises multinationales ont tendance à se localiser dans les mêmes pays et dans les mêmes régions que leurs concurrentes. Cette tendance est plus forte à l'échelon régional qu'à l'échelon national. L'analyse des effets d'agglomération serait donc plus pertinente à une échelle géographique « fine ». L'influence des coûts du travail sur la décision de localisation est plus marquée au niveau régional. De plus, la concurrence entre les régions sur le plan des salaires joue plus à l'intérieur des pays qu'entre régions de pays différents.

How do firms agglomerate? A study of FDI in france

This paper studies the determinants of location choice by foreign investors in France using a sample of almost 4000 foreign investments over 10 years and 92 locations. Concerning agglomeration effects, we find very strong evidence of positive spillovers between firms, and identify detailed patterns of clustering, assessing, for instance, the countries of origin and the industries for which those spillovers are the most substantial. Concerning regional policies, we find very little evidence of any positive impact. Finally, we identify a 'learning process' of FDI, the location decisions becoming more remote from the country of origin during the period we study

How do firms agglomerate? A study of FDI in france

This paper studies the determinants of location choice by foreign investors in France using a sample of almost 4000 foreign investments over 10 years and 92 locations. Concerning agglomeration effects, we find very strong evidence of positive spillovers between firms, and identify detailed patterns of clustering, assessing, for instance, the countries of origin and the industries for which those spillovers are the most substantial. Concerning regional policies, we find very little evidence of any positive impact. Finally, we identify a ‘learning process’ of FDI, the location decisions becoming more remote from the country of origin during the period we study

Horizontal and vertical intra-industry trade of Nafta and Mercosur: The case of the automobile industry

The NAFTA and MERCOSUR agreements seem to have accelerated the regional integration process respectively within North and South of America. In the South in particular, MERCOSUR has led to trade liberalisation and deregulation, which has resulted in significant growth of its regional trade. In this article, we study the pattern of that trade growth in the automobile industry. Our results highlight an increase of intra-industry trade in the corresponding industry since the beginning of the 1990s. Firstly, we use the Grubel and Lloyd indicator (1975). Secondly, following Abd-el-Rahman (1991), Greenaway et al. (1995), Fontagné and Freudenberg (1997), we distinguish horizontally differentiated goods from vertically differentiated goods using a comparison of the unit values. With the increase of intra-industry trade, it appears that MERCOSUR has favoured in particular the development of trade in vertically differentiated goods. In NAFTA, intra-industry trade exists in most sectors and in two bilateral relations (US-Canada and US-Mexico). In MERCOSUR, the automobile industry has experienced the highest rate of growth in intraindustry trade, which accounts for 66% of total trade and 90% of all intra-regional trade. Thirdly, we analyse the nature of that increase and more precisely, the determinants of intra-industry trade. In order to explain the pattern of trade for the automobile industry, we use a gravity-type model taking into account some country-specific variables

Horizontal and vertical intra-industry trade of Nafta and Mercosur: The case of the automobile industry

The NAFTA and MERCOSUR agreements seem to have accelerated the regional integration process respectively within North and South of America. In the South in particular, MERCOSUR has led to trade liberalisation and deregulation, which has resulted in significant growth of its regional trade. In this article, we study the pattern of that trade growth in the automobile industry. Our results highlight an increase of intra-industry trade in the corresponding industry since the beginning of the 1990s. Firstly, we use the Grubel and Lloyd indicator (1975). Secondly, following Abd-el-Rahman (1991), Greenaway et al. (1995), Fontagné and Freudenberg (1997), we distinguish horizontally differentiated goods from vertically differentiated goods using a comparison of the unit values. With the increase of intra-industry trade, it appears that MERCOSUR has favoured in particular the development of trade in vertically differentiated goods. In NAFTA, intra-industry trade exists in most sectors and in two bilateral relations (US-Canada and US-Mexico). In MERCOSUR, the automobile industry has experienced the highest rate of growth in intraindustry trade, which accounts for 66% of total trade and 90% of all intra-regional trade. Thirdly, we analyse the nature of that increase and more precisely, the determinants of intra-industry trade. In order to explain the pattern of trade for the automobile industry, we use a gravity-type model taking into account some country-specific variables

La localisation à l'étranger des entreprises multinationales

La décision de localisation d'une entreprise multinationale peut être décrite comme une séquence de choix géographiques dans laquelle l'entreprise choisit d'abord un pays puis une région à l'intérieur de ce pays. Cette séquence de choix est confirmée par l'analyse du comportement des entreprises japonaises en Europe. La structure géographique du choix est prise en compte en séparant les déterminants du choix national et ceux du choix infra-national. Les entreprises multinationales ont tendance à se localiser dans les mêmes pays et dans les mêmes régions que leurs concurrentes. Cette tendance est plus forte à l'échelon régional qu'à l'échelon national. L'analyse des effets d'agglomération serait donc plus pertinente à une échelle géographique " fine ". L'influence des coûts du travail sur la décision de localisation est plus marquée au niveau régional. De plus, la concurrence entre les régions sur le plan des salaires joue plus à l'intérieur des pays qu'entre régions de pays différents

KOJIMA K., Japan and a new world economic order

Mucchielli Jean-Louis. KOJIMA K., Japan and a new world economic order. In: Revue d'économie industrielle, vol. 14, 4e trimestre 1980. Vers une nouvelle division internationale du travail. pp. 246-247