WP2
Workpackage 2
The competition effect of cross-border capital movement and domestic
spillovers of FDI
Partner responsible: UNOTT
Partners involved:
IEHAS
CESR
IERS
UNOTT
The objectives are sixfold:
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To provide a comprehensive review of the potential channels via
which spillovers can be generated;
-
To evaluate the relationship between host country characteristics
and absorptive capacity;
-
To assess the impact of inward investment in the adjustment of the
transition economies;
-
To review the evidence on spillovers from FDI in the transition
economies;
-
To estimate a range of models designed to identify spillovers from
recent investments;
-
To evaluate the policy implications of spillovers for economic catch-up
in the transition economies.
Workpackage 2 will involve both qualitative and quantitative analysis;
some elements will be desk based, some will involve fieldwork. The
project will involve the following tasks:
-
The existing literature on the motivation for FDI and the effects of
FDI on the host country will be surveyed to provide a background for
the empirical work.
-
Coordination and harmonisation of existing firm/plant level databases
to analyse the effects of FDI on different host countries for both
developed and transition economies. For other countries further
firm/plant level data will have to be collected.
-
Empirical analysis of the determinants of FDI, paying particular
attention to differences between transition and developed countries.
This part of the workpackage will use firm/plant, sector and/or country
level data as available, which will be analysed using panel data
techniques.
-
The focus here is on whether domestic firms benefit from the presence
of foreign firms through increasing productivity, and whether FDI is a
substitute or complement for imports in the host country.
Cross-country comparisons between developed and transition economies
will be carried out.
