Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI

Using firm-level data for Jordan, the paper estimates the extent to which growth spillovers from foreign direct investment (FDI) to local firms stem from persistent learning externalities (i.e., they endure even after foreign investment leaves as k...

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Main Authors:	Davies, Ronald B., Lamla, Michael J., Schiffbauer, Marc
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	TAX INCENTIVES GROWTH RATES EMPLOYMENT CREDIT MARKETS EXTERNAL MNES EXPORT MARKETS ECONOMIC GROWTH ACCOUNTING PRODUCTION LAGS MULTINATIONAL CORPORATIONS FOREIGN INVESTORS INCOME FOREIGN OWNERSHIP EQUILIBRIUM PRICE MARGINAL COST EMERGING ECONOMIES REGULATORY ENVIRONMENTS EXCHANGE INFORMATION LABOR FORCE DEVELOPING COUNTRIES ELASTICITY DEVELOPING ECONOMIES INVESTMENT GROWTH EFFECTS INCENTIVES ECONOMIC POLICY VARIABLES CAPITAL STOCK PRICE TAX INPUTS JOINT VENTURES OWNERSHIP INVESTMENT BY SECTOR FOREIGN INVESTMENTS DEVELOPING COUNTRY TRENDS COMMUNICATIONS ADVANCED COUNTRIES MULTINATIONAL ENTERPRISES GLOBAL ECONOMY TRAINING DEVELOPMENT ECONOMICS PORTFOLIOS PRODUCTIVITY EXTERNALITIES TRANSFERS MARKETS ORGANIZATIONS PUBLIC FINANCE INTERNATIONAL ECONOMICS TECHNOLOGY TRANSFERS DIRECT INVESTMENT LABOR ELASTICITY OF SUBSTITUTION DISINVESTMENT UTILITY REAL ESTATE FINANCE CORPORATE TAX MARKET ECONOMIES INVESTMENT DECISIONS TECHNOLOGY EQUITY INVESTORS PRODUCTIVITY GROWTH ECONOMIC SURVEYS CAPITAL POLICIES CAPITAL VARIABLE VALUE FOREIGN DIRECT INVESTMENT CREDIT FOREIGN TECHNOLOGY MACROECONOMICS FOREIGN INVESTMENT DEMAND TRANSITION COUNTRIES TAX RATES EMPLOYMENT GROWTH FOREIGN TECHNOLOGIES JOB CREATION SHARES AFFILIATED ORGANIZATIONS BENCHMARK EMERGING PRODUCTION FUNCTION ECONOMICS OUTPUT MANAGEMENT REGRESSION ANALYSIS COMPARATIVE ECONOMICS EXPOSURE ECONOMIC DEVELOPMENT TRADE GDP GOODS THEORY SECURITY ECONOMIES OF SCALE DOMESTIC ECONOMY TECHNOLOGY TRANSFER GROWTH RATE INVESTMENT RISK HOST COUNTRY SHARE FDI INTERNATIONAL STANDARD SUPPLY BANKING AFFILIATED FOREIGN WORKERS MNE INVESTMENTS SUPPLIERS LABOUR CAPITAL INVESTMENT TECHNOLOGIES PRICES DEVELOPMENT POLICY COMPETITION INVESTMENT DECISION
Online Access:	http://documents.worldbank.org/curated/en/2016/03/26009198/learning-or-leaning-persistent-transitory-growth-spillovers-fdi http://hdl.handle.net/10986/23930

id	okr-10986-23930
recordtype	oai_dc
spelling	okr-10986-239302021-04-23T14:04:18Z Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI Davies, Ronald B. Lamla, Michael J. Schiffbauer, Marc TAX INCENTIVES GROWTH RATES EMPLOYMENT CREDIT MARKETS EXTERNAL MNES EXPORT MARKETS ECONOMIC GROWTH ACCOUNTING PRODUCTION LAGS MULTINATIONAL CORPORATIONS FOREIGN INVESTORS INCOME FOREIGN OWNERSHIP EQUILIBRIUM PRICE MARGINAL COST EMERGING ECONOMIES REGULATORY ENVIRONMENTS EXCHANGE INFORMATION LABOR FORCE DEVELOPING COUNTRIES ELASTICITY DEVELOPING ECONOMIES INVESTMENT GROWTH EFFECTS INCENTIVES ECONOMIC POLICY VARIABLES CAPITAL STOCK PRICE TAX INPUTS JOINT VENTURES OWNERSHIP INVESTMENT BY SECTOR FOREIGN INVESTMENTS DEVELOPING COUNTRY TRENDS COMMUNICATIONS ADVANCED COUNTRIES MULTINATIONAL ENTERPRISES GLOBAL ECONOMY TRAINING DEVELOPMENT ECONOMICS PORTFOLIOS PRODUCTIVITY EXTERNALITIES TRANSFERS MARKETS ORGANIZATIONS PUBLIC FINANCE INTERNATIONAL ECONOMICS TECHNOLOGY TRANSFERS DIRECT INVESTMENT LABOR ELASTICITY OF SUBSTITUTION DISINVESTMENT UTILITY REAL ESTATE FINANCE CORPORATE TAX MARKET ECONOMIES INVESTMENT DECISIONS TECHNOLOGY EQUITY INVESTORS PRODUCTIVITY GROWTH ECONOMIC SURVEYS CAPITAL POLICIES CAPITAL VARIABLE VALUE FOREIGN DIRECT INVESTMENT CREDIT FOREIGN TECHNOLOGY MACROECONOMICS FOREIGN INVESTMENT DEMAND TRANSITION COUNTRIES TAX RATES EMPLOYMENT GROWTH FOREIGN TECHNOLOGIES JOB CREATION SHARES AFFILIATED ORGANIZATIONS BENCHMARK EMERGING PRODUCTION FUNCTION ECONOMICS OUTPUT MANAGEMENT REGRESSION ANALYSIS COMPARATIVE ECONOMICS EXPOSURE ECONOMIC DEVELOPMENT TRADE GDP GOODS THEORY SECURITY ECONOMIES OF SCALE DOMESTIC ECONOMY TECHNOLOGY TRANSFER GROWTH RATE INVESTMENT RISK HOST COUNTRY SHARE FDI INTERNATIONAL STANDARD SUPPLY BANKING AFFILIATED FOREIGN WORKERS MNE INVESTMENTS SUPPLIERS LABOUR CAPITAL INVESTMENT TECHNOLOGIES PRICES DEVELOPMENT POLICY COMPETITION INVESTMENT DECISION Using firm-level data for Jordan, the paper estimates the extent to which growth spillovers from foreign direct investment (FDI) to local firms stem from persistent learning externalities (i.e., they endure even after foreign investment leaves as knowledge has been transferred to local firms) or from transitory effects (e.g., demand increases that evaporate following disinvestment). The paper find that spillovers have a significant transitory nature, with employment and capital growth declining when FDI falls, particularly in downstream industries supplied by locals. This suggests that if FDI-attracting policies are intended to promote sustainable growth, it may be more effective to attract and retain FDI via long-term structural policies, for instance, through low corporate tax rates rather than temporary tax holidays or through policies that strengthen the domestic absorptive capacity and linkages between foreign and local firms. 2016-03-10T16:45:52Z 2016-03-10T16:45:52Z 2016-03 Working Paper http://documents.worldbank.org/curated/en/2016/03/26009198/learning-or-leaning-persistent-transitory-growth-spillovers-fdi http://hdl.handle.net/10986/23930 English en_US Policy Research Working Paper;No. 7591 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa Jordan
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	TAX INCENTIVES GROWTH RATES EMPLOYMENT CREDIT MARKETS EXTERNAL MNES EXPORT MARKETS ECONOMIC GROWTH ACCOUNTING PRODUCTION LAGS MULTINATIONAL CORPORATIONS FOREIGN INVESTORS INCOME FOREIGN OWNERSHIP EQUILIBRIUM PRICE MARGINAL COST EMERGING ECONOMIES REGULATORY ENVIRONMENTS EXCHANGE INFORMATION LABOR FORCE DEVELOPING COUNTRIES ELASTICITY DEVELOPING ECONOMIES INVESTMENT GROWTH EFFECTS INCENTIVES ECONOMIC POLICY VARIABLES CAPITAL STOCK PRICE TAX INPUTS JOINT VENTURES OWNERSHIP INVESTMENT BY SECTOR FOREIGN INVESTMENTS DEVELOPING COUNTRY TRENDS COMMUNICATIONS ADVANCED COUNTRIES MULTINATIONAL ENTERPRISES GLOBAL ECONOMY TRAINING DEVELOPMENT ECONOMICS PORTFOLIOS PRODUCTIVITY EXTERNALITIES TRANSFERS MARKETS ORGANIZATIONS PUBLIC FINANCE INTERNATIONAL ECONOMICS TECHNOLOGY TRANSFERS DIRECT INVESTMENT LABOR ELASTICITY OF SUBSTITUTION DISINVESTMENT UTILITY REAL ESTATE FINANCE CORPORATE TAX MARKET ECONOMIES INVESTMENT DECISIONS TECHNOLOGY EQUITY INVESTORS PRODUCTIVITY GROWTH ECONOMIC SURVEYS CAPITAL POLICIES CAPITAL VARIABLE VALUE FOREIGN DIRECT INVESTMENT CREDIT FOREIGN TECHNOLOGY MACROECONOMICS FOREIGN INVESTMENT DEMAND TRANSITION COUNTRIES TAX RATES EMPLOYMENT GROWTH FOREIGN TECHNOLOGIES JOB CREATION SHARES AFFILIATED ORGANIZATIONS BENCHMARK EMERGING PRODUCTION FUNCTION ECONOMICS OUTPUT MANAGEMENT REGRESSION ANALYSIS COMPARATIVE ECONOMICS EXPOSURE ECONOMIC DEVELOPMENT TRADE GDP GOODS THEORY SECURITY ECONOMIES OF SCALE DOMESTIC ECONOMY TECHNOLOGY TRANSFER GROWTH RATE INVESTMENT RISK HOST COUNTRY SHARE FDI INTERNATIONAL STANDARD SUPPLY BANKING AFFILIATED FOREIGN WORKERS MNE INVESTMENTS SUPPLIERS LABOUR CAPITAL INVESTMENT TECHNOLOGIES PRICES DEVELOPMENT POLICY COMPETITION INVESTMENT DECISION
spellingShingle	TAX INCENTIVES GROWTH RATES EMPLOYMENT CREDIT MARKETS EXTERNAL MNES EXPORT MARKETS ECONOMIC GROWTH ACCOUNTING PRODUCTION LAGS MULTINATIONAL CORPORATIONS FOREIGN INVESTORS INCOME FOREIGN OWNERSHIP EQUILIBRIUM PRICE MARGINAL COST EMERGING ECONOMIES REGULATORY ENVIRONMENTS EXCHANGE INFORMATION LABOR FORCE DEVELOPING COUNTRIES ELASTICITY DEVELOPING ECONOMIES INVESTMENT GROWTH EFFECTS INCENTIVES ECONOMIC POLICY VARIABLES CAPITAL STOCK PRICE TAX INPUTS JOINT VENTURES OWNERSHIP INVESTMENT BY SECTOR FOREIGN INVESTMENTS DEVELOPING COUNTRY TRENDS COMMUNICATIONS ADVANCED COUNTRIES MULTINATIONAL ENTERPRISES GLOBAL ECONOMY TRAINING DEVELOPMENT ECONOMICS PORTFOLIOS PRODUCTIVITY EXTERNALITIES TRANSFERS MARKETS ORGANIZATIONS PUBLIC FINANCE INTERNATIONAL ECONOMICS TECHNOLOGY TRANSFERS DIRECT INVESTMENT LABOR ELASTICITY OF SUBSTITUTION DISINVESTMENT UTILITY REAL ESTATE FINANCE CORPORATE TAX MARKET ECONOMIES INVESTMENT DECISIONS TECHNOLOGY EQUITY INVESTORS PRODUCTIVITY GROWTH ECONOMIC SURVEYS CAPITAL POLICIES CAPITAL VARIABLE VALUE FOREIGN DIRECT INVESTMENT CREDIT FOREIGN TECHNOLOGY MACROECONOMICS FOREIGN INVESTMENT DEMAND TRANSITION COUNTRIES TAX RATES EMPLOYMENT GROWTH FOREIGN TECHNOLOGIES JOB CREATION SHARES AFFILIATED ORGANIZATIONS BENCHMARK EMERGING PRODUCTION FUNCTION ECONOMICS OUTPUT MANAGEMENT REGRESSION ANALYSIS COMPARATIVE ECONOMICS EXPOSURE ECONOMIC DEVELOPMENT TRADE GDP GOODS THEORY SECURITY ECONOMIES OF SCALE DOMESTIC ECONOMY TECHNOLOGY TRANSFER GROWTH RATE INVESTMENT RISK HOST COUNTRY SHARE FDI INTERNATIONAL STANDARD SUPPLY BANKING AFFILIATED FOREIGN WORKERS MNE INVESTMENTS SUPPLIERS LABOUR CAPITAL INVESTMENT TECHNOLOGIES PRICES DEVELOPMENT POLICY COMPETITION INVESTMENT DECISION Davies, Ronald B. Lamla, Michael J. Schiffbauer, Marc Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
geographic_facet	Middle East and North Africa Jordan
relation	Policy Research Working Paper;No. 7591
description	Using firm-level data for Jordan, the paper estimates the extent to which growth spillovers from foreign direct investment (FDI) to local firms stem from persistent learning externalities (i.e., they endure even after foreign investment leaves as knowledge has been transferred to local firms) or from transitory effects (e.g., demand increases that evaporate following disinvestment). The paper find that spillovers have a significant transitory nature, with employment and capital growth declining when FDI falls, particularly in downstream industries supplied by locals. This suggests that if FDI-attracting policies are intended to promote sustainable growth, it may be more effective to attract and retain FDI via long-term structural policies, for instance, through low corporate tax rates rather than temporary tax holidays or through policies that strengthen the domestic absorptive capacity and linkages between foreign and local firms.
format	Working Paper
author	Davies, Ronald B. Lamla, Michael J. Schiffbauer, Marc
author_facet	Davies, Ronald B. Lamla, Michael J. Schiffbauer, Marc
author_sort	Davies, Ronald B.
title	Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
title_short	Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
title_full	Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
title_fullStr	Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
title_full_unstemmed	Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI
title_sort	learning or leaning : persistent and transitory growth spillovers from fdi
publisher	World Bank, Washington, DC
publishDate	2016
url	http://documents.worldbank.org/curated/en/2016/03/26009198/learning-or-leaning-persistent-transitory-growth-spillovers-fdi http://hdl.handle.net/10986/23930
_version_	1764455198601773056

Learning or Leaning : Persistent and Transitory Growth Spillovers from FDI

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