14 research outputs found
FDI, Global Value Chains, and Local Sourcing in Developing Countries
The local sourcing of intermediate products is one the main channels for foreign direct investment (FDI) spillovers. This paper investigates whether and how participation and positioning in the global value chains (GVCs) of host countries is associated to local sourcing by foreign investors. Matching two firm-level data sets of 19 Sub-Saharan African countries and Vietnam to country-sector level measures of GVC involvement, we find that more intense GVC participation and upstream specialization are associated to a higher share of inputs sourced locally by foreign investors. These effects are larger in countries with stronger rule of law and better education
FDI and Local Linkages in Developing Countries: Evidence from Sub-Saharan Africa
This paper investigates the determinants of backward linkages of foreign manufacturing firms in 19 Sub-Saharan African
countries. We shed light on the micro and macro level factors which contribute to a higher degree of interactions between foreign subsidiaries
and local firms. Our results indicate that the time since entry of foreign firms, the presence of a local partner in the ownership structure
and a finalmarket orientation are associated with higher local linkages. Finally, we lend further support to the idea that good
institutions and in particular a reliable legal system are pre-conditions for boosting the linkages generated by foreign firms