How do human capital and R&D structure facilitate FDI knowledge spillovers to local firm innovation? a panel threshold approach

This paper examines how local firms’ structure of human capital and R&D strategies influence their absorption of FDI knowledge spillovers. Using a unique dataset of Chinese firms in Beijing Zhongguancun Science Park from 2009 to 2015, our panel endogenous threshold models confirm two thresholds for human capital diversity and one threshold for R&D diversity in facilitating FDI spillovers. When human capital diversity is below its second threshold, FDI presence positively influences local firms’ innovation performance; while above the second threshold, the FDI turns to an insignificant impact. Besides, when R&D diversity is below its single threshold, FDI spillovers are positively associated with local firms’ innovation; otherwise, the effect of FDI is insignificantly negative. Our findings highlight the importance of human capital and R&D structures in local firms’ absorptive capacity. Local organizations need to keep diversifying their human capital and R&D strategies to learn from FDI knowledge but avoid allocating their efforts evenly upon sub-categories within the two resources.

Foreign direct investment and productivity spillovers: a firm-level analysis of Bangladesh in comparison with Vietnam

Foreign direct investment (FDI) is expected to generate external effects—usually termed FDI spillovers—for a host country, and these spillovers are thought to have consequences on the productivity of domestic firms. Despite this strong expectation, the empirical findings on FDI spillover are still indecisive. This study examines firm-level panel data to determine the effects of FDI spillover on firms’ productivity in Bangladesh in comparison to Vietnam. We consider both the horizontal and vertical (backward and forward) spillover effects of FDI. We find evidence that Bangladeshi firms gain productivity improvement through intra-industry or horizontal linkages, whereas Vietnamese firms gain through backward linkages. Our findings suggest that increases in foreign presence in the same industry for Bangladesh and in downstream industries for Vietnam are related with increase in output of domestic firms.

TECHNICAL EFFICIENCY OF VIETNAMESE MANUFACTURING FIRMS: DO FDI SPILLOVERS MATTER?

This paper investigates the spillover effect (backward, forward, and horizontal linkage) of foreign direct investment (FDI) firms on the technical efficiency of local firms. This research extends the literature by employing meta-frontier framework analysis which is superior to single stochastic analysis because each industry has a different combination of inputs (or dissimilar production technology). Using a large data set (178,700 firm-year observations), this paper finds evidence on the negative impact of the horizontal and forward linkages on the meta-technical inefficiency for the data set as a whole as well as in three economic regions, in private owned firms, and capital and labor-intensive sectors in Vietnam.