Research Insights: Does R&D Activity Stimulated by Chile’s FONDEF and FONTEC Programs Lead to Knowlege Spillovers?

2020 ◽  
Author(s):  
Gustavo Crespi ◽  
Lucas Figal Garone ◽  
Alessandro Maffioli ◽  
Ernesto H. Stein
Keyword(s):  
Total Factor Productivity ◽  
Program Design ◽  
Knowledge Spillovers ◽  
Spillover Effects ◽  
Research Centers ◽  
Factor Productivity ◽  
Large Share ◽  
Grant Programs ◽  
Positive Knowledge ◽  
Positive Spillovers

Chile's FONDEF and FONTEC R&D grant programs both boost the productivity of direct beneficiaries, increasing total factor productivity (TFP) by around 4.2 percent. However, spillover effects are contingent on program design. Only FONDEF funded projects (requiring collaboration between firms and research centers) generate positive spillovers. FONTEC projects, which fund R&D within the firm, do not. Spillover effects are nonlinear according to the share of firms within a sectorregion receiving subsidies. Positive knowledge spillovers dominate when the share of treated firms is small. However, if the program supports a large share of a firms rivals, spillovers decline as a result of a business-stealing effect.

scholarly journals The effect of reverse knowledge spillovers on the total factor productivity of emerging markets

2020 ◽  
pp. 21-42
Author(s):  
Andrei Panibratov ◽  
Megan Fitzpatrick
Keyword(s):  
Emerging Markets ◽  
Total Factor Productivity ◽  
Knowledge Spillovers ◽  
Developing Economies ◽  
Spillover Effects ◽  
Factor Productivity ◽  
Developed Markets ◽  
Tfp Growth ◽  
Negative Effect ◽  
The Impact

The aim of this paper is to shed the light on the phenomenon and mechanisms of knowledge spillovers from developed economies to emerging markets through the lens of productivity effects. We hypothesize on the impact of foreign R&D stocks on the total factor productivity growth in emerging markets and on the moderating effect of R&D stocks on the knowledge spillover effects. We use panel data from 38 countries for the period of 2001–2014. Our findings suggest that firms investing in developed markets are able to improve TFP growth via reverse spillovers. Two important findings having managerial value are that, on average, the effect of OFDI on productivity becomes apparent three years after the initial investment. The study also indicates that investment efforts have a negative effect on TFP growth in the year of investment. This research contributes to the ex- isting literature by analyzing bilateral FDI stocks between emerging and developed markets and the impact of both traditional and reverse spillovers on TFP growth in developing economies.

Foreign Direct Investment and Total Factor Productivity: Any Nexus?

2020 ◽  
Vol 14 (2) ◽  
pp. 164-190
Author(s):  
Mohammed Abdullah ◽  
Murshed Chowdhury
Keyword(s):  
Foreign Direct Investment ◽  
Total Factor Productivity ◽  
Direct Investment ◽  
Growth Models ◽  
Generalized Method Of Moments ◽  
Spillover Effects ◽  
Jel Classification ◽  
Estimation Methods ◽  
Factor Productivity ◽  
The Impact

This study examines the impact of foreign direct investment (FDI) on the total factor productivity (TFP) of host countries. Extensions of the new growth theory provide a framework in which FDI increases the growth rate of a host country through technology transfer, diffusion and spillover effects. We construct four new series of TFP using the framework of neoclassical growth models. We also address the issue of endogeneity using the generalized method of moments. Our estimations using a balanced panel of 77 low- and middle-income countries suggest that FDI could not promote TFP in the countries studied. Our sensitivity analysis, in terms of alternative estimation methods, data, models and time period, reinforces the findings. We observe that the lack of absorptive capacity is likely to be an important reason for not having a direct relationship between FDI and TFP. JEL Classification: F21, F23, O33, F43, C33

scholarly journals The Impact of Foreign Direct Investment Spillover Effects on Total Factor Productivity in Sri Lanka

2020 ◽  
pp. 37-49
Author(s):  
Kalaichevi Ravinthirakumaran ◽  
Tarlok Singh ◽  
Eliyathamby Selvanathan ◽  
Saroja Selvanathan
Keyword(s):  
Human Capital ◽  
International Trade ◽  
Sri Lanka ◽  
Research And Development ◽  
Total Factor Productivity ◽  
Spillover Effects ◽  
Annual Data ◽  
Factor Productivity ◽  
Positive Effects ◽  
The Impact

This paper examines whether FDI generates productivity spillovers in Sri Lanka, using the annual data over the period from 1978 to 2015. The autoregressive distributed lag model has been estimated to investigate the effects of FDI, research and development, human capital, international trade, technological gap, rate of inflation, population growth and civil war on total factor productivity (TFP). The results reveal that FDI positively influences TFP. The results also confirm that research and development, human capital and international trade have positive effects. The findings suggest that Sri Lanka needs to increase investment in human capital and in research and development and needs to introduce policies to attract FDI inflows.

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