Collecting the Pieces of the FDI Knowledge Spillovers Puzzle

World Bank Research Observer (2008)

32 Pages Posted: 30 May 2014

See all articles by Roger Smeets

Roger Smeets

Rutgers, The State University of New Jersey - Management & Global Business

Date Written: October 1, 2008

Abstract

Recent surveys of the empirical literature have concluded that the evidence is mixed on the magnitude, direction, and even existence of knowledge spillovers from foreign direct investment (FDI). This article reviews the recent theoretical and empirical literature that responds to these inconclusive results and considers three main issues: spillover channels, mediating factors, and FDI heterogeneity. Studies that take into account individual spillover channels find robust evidence of knowledge spillovers from FDI. Studies on the importance of mediating factors and FDI heterogeneity are less conclusive and could benefit from greater convergence in methodologies and greater specificity in the spillover channels of interest. More generally, many studies do not properly distinguish between knowledge spillovers and knowledge transfers, and empirical studies seem to greatly outnumber theoretical studies.

JEL Classification: F23, O33

Suggested Citation

Smeets, Roger, Collecting the Pieces of the FDI Knowledge Spillovers Puzzle (October 1, 2008). World Bank Research Observer (2008), Available at SSRN: https://ssrn.com/abstract=2442966

Roger Smeets (Contact Author)

Rutgers, The State University of New Jersey - Management & Global Business ( email )

Newark, NJ
United States

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