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Imports, FDI Spillovers and Firm Performance

Year: 2024

Type: article

Abstract: ABSTRACT This paper investigates the productivity effects of the number of inputs a firm chooses to import. It also analyses how accounting for the productivity gains from imported inputs affects foreign direct investment (FDI) spillover. The identification of the gains from imports comes from comparing productivity differences among firms that use different numbers of imported inputs, all else being equal. Using a firm‐level dataset, I find a positive gain from imported inputs for both domestic and foreign‐owned firms with the magnitude being larger for the latter. Moreover, I find a positive horizontal FDI spillover; whereas, the results for backward and forward spillovers seem mixed. Finally, I find little evidence suggesting accounting for the productivity effects of imported inputs affects gains from foreign presence. This indicates that productivity gains from imported inputs and FDI spillover are different and unrelated.

Source: Review of International Economics

DOI: 10.1111/roie.12779

Author: Anwar S. Adem

Institution: University of Warwick

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,190