Fdi spillovers between manufacturing-service sectors: myth or reality?

There is a rich body of research on FDI spillovers, however, the findings are not conclusive. The mixed results suggest that FDI spillovers may come from different sources other than three mostly mentioned in literature (i.e. demonstration, competition, and employee movement). This paper proposes th...

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Bibliographic Details
Published inJournal of International Economics and Management no. 62; pp. 3 - 16
Main Author Le Thai Phong
Format Journal Article
LanguageEnglish
Published Hanoi Foreign Trade University 01.02.2014
HDV INSER., JSC
Subjects
fdi spillovers
Foreign investment
knowledge-intensive business service
Manufacturing
manufacturization
Service industries
servitization
Spillover effect
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Summary:There is a rich body of research on FDI spillovers, however, the findings are not conclusive. The mixed results suggest that FDI spillovers may come from different sources other than three mostly mentioned in literature (i.e. demonstration, competition, and employee movement). This paper proposes that the external effects also happen between different sectors. Put differently, local manufacturing firms can be, either positively or negatively, impacted by foreign service firms; and local service firms can be, in the same vein, affected by foreign manufacturing firms. The mechanism for this is described via three new channels: servitization, manufacturization, and knowledge-intensitve business service. The findings show that there exists FDI spillovers between manufacturing and service sectors.
ISSN:2615-9856
2615-9856