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Spillovers from Foreign Direct Investment in S panish Manufacturing Firms
Author(s) -
SánchezSellero Pedro,
RosellMartínez Jorge,
GarcíaVázquez José Manuel
Publication year - 2014
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12115
Subject(s) - foreign direct investment , spillover effect , absorptive capacity , foreign capital , capital (architecture) , international economics , manufacturing , economics , international trade , government (linguistics) , business , monetary economics , industrial organization , macroeconomics , history , linguistics , philosophy , archaeology , marketing
This paper examines the effect of participation by foreign capital and the spillovers from a foreign presence on the technical progress of Spanish manufacturing firms. The results show that foreign direct investment ( FDI ) creates positive spillover effects for local firms, and when the presence of foreign capital and the absorptive capacity of spillovers from FDI are large, more technical progress ensues. Also, local companies in capital‐ and research and development ( R&D )‐intensive industries experience larger positive FDI spillovers. For these reasons, government policies should aim to attract FDI , especially in the aforementioned industries.