In Search of Determinants of FDI Forward Spillovers: A Meta-Analysis

Abstract

Drawing on a unique dataset of 530 estimates from 19 studies on foreign direct investment forward productivity spillovers in China, our prime objective is to investigate determinants of forward spillovers from foreign direct investment using Bayesian Model Averaging based Meta-Analysis. Our results suggest that forward spillovers vary across firm attributes, including the ownership structure of foreign firms, the origin of foreign firms, market orientation of foreign firms, the ownership structure of local firms and the technological levels of local firms. Specifically, wholly-owned subsidiaries yields positive technology diffusion to local firms in upstream sectors while joint ventures negative; both foreign firms from Hong Kong, Macao and Taiwan and other economies create negative spillover effects on local buyers; local-orientated foreign firms are likely to generate positive productivity spillovers while export-orientated foreign firms negative; non-state-owned enterprises are likely to benefit more forward technology spillovers from foreign direct investment than state-owned enterprises; middle-tech local firms tend to obtain more forward productivity spillovers than high-tech local firms and low-tech local firms.