MNE Spillovers in Developing Asian and Latin American Countries

Abstract

This article explores the main trends of multinational enterprise (MNE) spillovers involving technology and human resources development, with special attention to policy implications, in the developing countries of Asia and Latin America with the Caribbean. Developing Asian countries have dynamically attracted foreign direct investment (FDI) and have been successful in instituting policy measures to enhance MNE spillovers, with positive impacts on domestic productivity. Latin American countries have lagged behind developing Asian countries as regards enhancing MNE spillovers. Despite a convergence of the inward FDI trend in the two regions, with the recent catching-up trend of Latin American countries, the latter region shows more limited spillovers. Selected research findings are surveyed and various policy measures suggested, particularly in relation to two policy issues: i) complementarity, co-ordination and synchronisation; and ii) targeting specific firms, industries and HRD (mostly in training and education).