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A meta-analysis of the indirect impact of foreign direct investment in old and new EU member states: Understanding productivity spillovers

Bruno, RL; Cipollina, M; (2018) A meta-analysis of the indirect impact of foreign direct investment in old and new EU member states: Understanding productivity spillovers. The World Economy , 41 (5) pp. 1342-1377. 10.1111/twec.12587. Green open access

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Abstract

In this paper, we summarise, combine and explain recent findings from firm-level empirical literature focusing on the indirect impact of foreign direct investment (FDI) on economic performance, measured as productivity, in the Enlarged Europe. We have reviewed 52 quantitative studies, released between 2000 and 2015 and codified 1,133 estimates. We run a regression of regressions which measures the strength of the FDI–productivity relationship. Taking advantage of large number of high-quality studies on FDI and its role in explaining the growth in firms’ productivity in Europe, we adopt recent meta-regression analysis methods—funnel asymmetry and precision estimate tests and precision-effect estimate with standard errors—to explain the heterogeneous impact of FDI. This paper assesses the country-specific impact of FDI on firms’ performance, after taking publication selection bias, econometric modelling and the individual studies’ characteristics fully into account. Our results show that on average FDI has a positive indirect impact on productivity. The impact is especially significant in selected European countries, and we interpret this as a sign of better absorptive capacities in those countries.

Type: Article
Title: A meta-analysis of the indirect impact of foreign direct investment in old and new EU member states: Understanding productivity spillovers
Open access status: An open access version is available from UCL Discovery
DOI: 10.1111/twec.12587
Publisher version: http://dx.doi.org/10.1111/twec.12587
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES
URI: https://discovery.ucl.ac.uk/id/eprint/10024866
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