Multinational Corporation Affiliates, Backward Linkages, and Productivity Spillovers in Developing and Emerging Economies : Evidence and Policy Making
Recent research on productivity spillovers from affiliates of multinational corporations in developing and emerging economies finds that backward linkages from affiliates of foreign-owned firms to local suppliers constitute the main channel transmi...
Main Authors: | , , |
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Format: | Working Paper |
Language: | English |
Published: |
World Bank, Washington, DC
2020
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/302481598274482747/Multinational-Corporation-Affiliates-Backward-Linkages-and-Productivity-Spillovers-in-Developing-and-Emerging-Economies-Evidence-and-Policy-Making http://hdl.handle.net/10986/34381 |
Summary: | Recent research on productivity
spillovers from affiliates of multinational corporations in
developing and emerging economies finds that backward
linkages from affiliates of foreign-owned firms to local
suppliers constitute the main channel transmitting
productivity spillovers. This finding has important policy
implications, given that host economy governments often
spend considerable resources on attracting multinational
corporation investments and promoting their impact on
technological development and economic growth. This paper
conducts a new and comprehensive survey of recent empirical
studies that focus on the drivers and impacts of backward
linkages between multinational corporation affiliates and
their local suppliers. The literature survey reveals that
several characteristics of multinational corporation
affiliates and domestic firms, host economy conditions, and
various mediating factors influence the level of use of
local suppliers, the nature and degree of technology
dissemination, and the materialization of productivity
spillovers among domestic firms. These findings are used to
identify the main areas where policy making can be
effective. The paper discusses various types of soft or
light-handed industrial policies that host economy
governments can design and implement to foster the extent of
linkages between multinational corporations and local
suppliers, facilitate technology dissemination, and enhance
productivity spillovers among domestic firms. |
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