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Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI / Ronald B. Davies.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Davies, Ronald B.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Economic Theory and Research.
- Emerging Markets.
- FDI.
- Foreign Direct Investment.
- International Economics and Trade.
- Investment and Investment Climate.
- Labor Policies.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Social Protections and Labor.
- Spillovers.
- Local Subjects:
- Economic Theory and Research.
- Emerging Markets.
- FDI.
- Foreign Direct Investment.
- International Economics and Trade.
- Investment and Investment Climate.
- Labor Policies.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Social Protections and Labor.
- Spillovers.
- Physical Description:
- 1 online resource (28 pages)
- Other Title:
- Learning or Leaning
- Place of Publication:
- Washington, D.C. : The World Bank, 2016.
- System Details:
- data file
- Summary:
- Using firm-level data for Jordan, the paper estimates the extent to which growth spillovers from foreign direct investment (FDI) to local firms stem from persistent learning externalities (i.e., they endure even after foreign investment leaves as knowledge has been transferred to local firms) or from transitory effects (e.g., demand increases that evaporate following isinvestment). The paper find that spillovers have a significant transitory nature, with employment and capital growth declining when FDI falls, particularly in downstream industries supplied by locals. This suggests that if FDI-attracting policies are intended to promote sustainable growth, it may be more effective to attract and retain FDI via long-term structural policies, for instance, through low corporate tax rates rather than temporary tax holidays or through policies that strengthen the domestic absorptive capacity and linkages between foreign and local firms.
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