TITLE:
Inter-Industry Productivity Spillovers from Japanese and US FDI in Mexico’s Manufacturing Sector
AUTHORS:
Leo Guzmán Anaya
KEYWORDS:
Foreign Direct Investment; Productivity Spillovers; Backward Linkages; Forward Linkages; Mexican Manufacturing Sector
JOURNAL NAME:
Technology and Investment,
Vol.4 No.4,
November
4,
2013
ABSTRACT: Foreign Direct Investment can have positive effects on host
countries by generating spillovers to domestic firms and contributing to
increases in their productivity. These productivity spillovers1 can take place
within an industry (intraindustry spillovers) and across industries
(inter-industry spillovers) as in the case of technology or knowledge transfer
to domestic suppliers (backward productivity spillovers) or customers (forward
productivity spillovers). Using unpublished economic census data from Mexico’s
manufacturing sector this study differs from others by comparing interindustry
productivity spillovers from Japanese and US FDI. Results show that Japanese
FDI increases the productivity of upstream sectors; however these gains seem to
be shared only among foreign suppliers, while US FDI does not seem to generate
backward productivity spillovers. Results show no presence of forward
productivity spillovers.