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Where do foreign direct investment-related technology spillovers come from in emerging economies? An exploration in Argentina in the 1990s

journal contribution
posted on 2023-06-08, 08:01 authored by Martin Bell, Anabel MarinAnabel Marin
Models underlying most research about foreign direct investment (FDI)-related spillovers suggest they originate in the centrally accumulated knowledge assets of multinational corporations (MNCs). From there a one-way 'pipeline' runs via a) international technology transfer to subsidiaries, b) 'leaks' into the host economy, c) varying degrees of absorption by domestic firms to d) those firms' productivity increases. We argue that this gives inadequate attention to knowledgecreating activities by MNC subsidiaries and domestic firms inside the host economy. These co-located and interacting activities are increasingly evident in knowledge-rich locations in advanced economies, reflecting location-specific advantages. We suggest here that such locally rooted and co-located knowledge creation may also lie between, but not necessarily causally connect, FDI and domestic firms' productivity growth in intermediate economies – as illustrated by the case of Argentina in the mid 1990s. Wider questions about policy are noted, with implications for future research highlighted.

History

Publication status

  • Published

Journal

European Journal of Development Research

ISSN

0957-8811

Issue

3

Volume

16

Page range

653-686

Pages

34.0

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Notes

This paper challenges conventional orthodoxy about the source of technology spillovers from FDI in countries like Argentina, showing the local contribution to be far more significant than the crude `spillovers¿ notion of new growth theorists suggests, in cases where the take-up is successful. Bell contributed more of the writing and drafting of the joint paper.

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-02-06

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