Open AccessThe effect of reverse knowledge spillovers on the total factor productivity of emerging markets
Author(s) -
Andrei Panibratov,
M D Fitzpatrick
Publication year - 2020
Publication title -
brics journal of economics
Language(s) - English
Resource type - Journals
eISSN - 2712-7702
pISSN - 2712-7508
DOI - 10.38050/2712-7508-2020-3
Subject(s) - total factor productivity , emerging markets , spillover effect , productivity , economics , monetary economics , foreign direct investment , panel data , investment (military) , knowledge spillover , value (mathematics) , international trade , international economics , industrial organization , macroeconomics , econometrics , machine learning , politics , political science , computer science , law
The aim of this paper is to shed the light on the phenomenon and mechanisms of knowledge spillovers from developed economies to emerging markets through the lens of productivity effects. We hypothesize on the impact of foreign R&D stocks on the total factor productivity growth in emerging markets and on the moderating effect of R&D stocks on the knowledge spillover effects. We use panel data from 38 countries for the period of 2001–2014. Our findings suggest that firms investing in developed markets are able to improve TFP growth via reverse spillovers. Two important findings having managerial value are that, on average, the effect of OFDI on productivity becomes apparent three years after the initial investment. The study also indicates that investment efforts have a negative effect on TFP growth in the year of investment. This research contributes to the ex- isting literature by analyzing bilateral FDI stocks between emerging and developed markets and the impact of both traditional and reverse spillovers on TFP growth in developing economies.