The two ways of FDI R&D spillovers: evidence from the French manufacturing industry

Using French firm-level panel data, this study investigates R&D spillovers from inward foreign direct investment (FDI) with respect to both horizontal and vertical linkages (backward and forward). Using a Crepon, Duguet and Mairesse (CDM) model, we estimate an R&D-augmented Cobb-Douglas prod...

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Bibliographic Details
Published inApplied economics Vol. 49; no. 25; pp. 2395 - 2408
Main Authors Ben Hassine, H., Boudier, F., Mathieu, C.
Format Journal Article
LanguageEnglish
Published London Routledge 28.05.2017
Taylor & Francis Ltd
Subjects
Backward linkages
Economic models
Foreign direct investment
Foreign investment
forward linkages
France
outsourcing
Production functions
R Manufacturers
R&D spillovers
Research & development
reverse spillovers
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Summary:Using French firm-level panel data, this study investigates R&D spillovers from inward foreign direct investment (FDI) with respect to both horizontal and vertical linkages (backward and forward). Using a Crepon, Duguet and Mairesse (CDM) model, we estimate an R&D-augmented Cobb-Douglas production function to assess the impact of R&D spillovers on firm performance. The results emphasize that international spillovers (from foreign affiliates to local firms) have a greater effect on firm performance than reverse spillovers (from local firms to foreign affiliates) and are more likely to be backward than forward. Moreover, the effect of backward spillovers depends on a firm's absorptive capacity and is amplified in the case of outsourcing relationships.
Bibliography:ObjectType-Article-1
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ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2016.1240345