Foreign Direct Investment, Backward Linkages, and Productivity Spillovers : What Governments Can Do to Strengthen Linkages and Their Impact
This note provides an up-to-date summary of the academic evidence around the drivers and channels for technology transfer and productivity spillovers by multinational corporations (MNC) operating in host economies. Foreign direct investment (FDI) i...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/255331589314877764/Foreign-Direct-Investment-Backward-Linkages-and-Productivity-Spillovers-What-Governments-Can-Do-to-Strengthen-Linkages-and-Their-Impact http://hdl.handle.net/10986/33761 |
| Summary: | This note provides an up-to-date summary
of the academic evidence around the drivers and channels for
technology transfer and productivity spillovers by
multinational corporations (MNC) operating in host
economies. Foreign direct investment (FDI) is a major
contributor to development. Besides the direct benefits FDI
brings in terms of increased capital, employment and
exports, the presence and operations of MNCs can also help
improve the productivity of local firms through backward
linkages and offer an important channel for the integration
of local firms into global value chains (GVC). However,
several market failures exist that get in the way of these
linkages and spillovers fully materializing. This note
highlights the main challenges as well as some policy
recommendations for host economy Governments to consider. |
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