Knowledge Spillovers from Foreign Direct Investment and the Role of Local R&amp;D Activities: Evidence from Indonesia

Todo, Yasuyuki; Miyamoto, Koji

doi:10.1086/505729

Cited by 82 publications

(57 citation statements)

References 39 publications

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“…One reason is that these empirical results largely depend on the method of measuring the absorptive capability of the host economy (Liu and Nishijima, 2013). From this viewpoint, Todo and Miyamoto (2006), Fu (2008), Lööf (2009), andHuang et al (2012), all of which have stressed the role of R&D activities as an intermediate factor of technology transfer, are noteworthy. Therefore, in this paper, we will use R&D potential as a proxy for the absorptive capability of Russia instead of the average education level in the recipient country, which has been adopted by many preceding studies on developing economies, in order to reexamine the absorption capacity hypothesis in the case of the Russian regions.…”

Section: Examination Of the Absorptive Capacity Hypothesismentioning

confidence: 99%

Foreign direct investment and regional economic development in Russia: an econometric assessment

Iwasaki

Suganuma

2015

Econ Change Restruct

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Abstract:In this paper, we estimate the effect of foreign direct investment (FDI) on total factor productivity (TFP) in Russian regions, paying special attention to the country's investment boom and the remarkable regional gaps in terms of cumulative direct investments in and after 2003. We also examine possible synergistic effects between FDI and local R&D potential to test the absorptive capacity hypothesis. Our estimation results strongly suggest the remarkable role of FDI in the regional economic development in Russia. In addition, we found that the positive effect of FDI on TFP may increase in the regions that received larger amounts of foreign capital.Furthermore, we detected a surprisingly robust and positive synergistic effect between FDI and local R&D potential, indicating that the absorptive capability is essential for linking FDI and regional economic development in Russia. JEL classification numbers: F21, O11, P25, P33, R11

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Section: Examination Of the Absorptive Capacity Hypothesismentioning

confidence: 99%

Foreign direct investment and regional economic development in Russia: an econometric assessment

Iwasaki

Suganuma

2015

Econ Change Restruct

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“…Although the "knowledge spillovers" from R&D activity have been widely recognized since Griliches (1979), few authors have incorporated it into the analysis of spillovers from FIEs. Todo and Miyamoto (2006) examined the horizontal spillover to Indonesian firms by segregating FIEs between those performing R&D and those that do not. They only found positive spillover from the FIEs performing R&D. Similarly, Todo (2006) found that Japanese firms enjoyed significant horizontal spillover from FIEs' R&D activity but not from their production activity.…”

Section: The Type Of Activity Engaged By Fiesmentioning

confidence: 99%

“…The extent of such spillovers is also shown to be shaped by the ownership structure (Jarvoick and Spartareanu, 2008), or the origin of FIEs (Huang, 2004). Meanwhile, Todo and Miyamoto (2006) found significant spillovers only from FIEs that perform R&D activities in the host country, suggesting that spillovers can be fairly different depending on the type of activity engaged by FIEs and their R&D activity rather their production may be the important source of spillover.…”

Section: Introductionmentioning

confidence: 99%

How do Chinese industries benefit from FDI spillovers?

Ito

Yashiro

et al. 2012

China Economic Review

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Recently, Foreign Invested Enterprises (FIEs) in China have increased their investment in not only production activity but also R&D activity. This paper examines the impact of spillovers from such activities on two types of innovations by Chinese domestic firms: Total Factor Productivity (TFP) and invention patent application, using comprehensive industry and province-level data. We evaluate such spillovers according to FIEs' ownership structure, the origin of foreign funds, and the type of their activity: R&D, and production. We find an interesting asymmetry between spillovers to TFP and patent application：while we do not find significant intra-industry spillovers from FIEs, which is in line with previous studies, we find robust inter-industries spillover on TFP. On the other hand, we find substantial intra-industry spillovers promoting invention patent application but no evidence of inter-industries spillovers. Furthermore, whereas spillovers from FIEs to Chinese firms' TFP stem from their production activities, the source of spillovers to invention patent application is mostly through their R&D activity. Our findings indicate a need for multi-dimensional evaluation on the role of FDI in developing countries.Keywords: China, FDI spillovers, R&D, Innovation JEL classifications: O12;O3;F23;O53 This paper is one of the products of DRC-RIETI joint research. We are grateful to Masahisa Fujita, Masayuki Morikawa and participants of the DRC-RIETI joint workshop at RIETI and DRC for their valuable comments. Remaining errors are those of the authors. The opinions expressed in this paper do not reflect those of RIETI or DRC of the State Council,

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“…shown on the first column, the coefficients for FsA, FsN, and FsU were assumed to be equal; (1999), Sjöholm (1999), Takii (2005), and Todo and Miyamoto (2006). 8 ; The hypothesis test of equal coefficients was not rejected at a five-percent level.…”

Section: Comparison Of Spillovers To Locally Owned Plantsmentioning

confidence: 99%

Do FDI spillovers vary among home economies?: Evidence from Indonesian manufacturing

Takii

2011

Journal of Asian Economics

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The paper addresses the question of whether effects on economic growth of inward FDI differ according to the origin of investors. Implications are derived for trends of regionalism. To address the question, the magnitudes of productivity spillovers from foreign firms to local firms are measured using groups of foreign investors' home regions with data for Indonesian manufacturing. The results of analyses suggest that MNCs from eastern Asian economies impart positive externalities to local firms, whereas MNCs from non-Asian countries did not impart significant effects. Furthermore, the results suggest that eastern Asian countries' MNCs impart stronger effects than Japanese MNCs do, whereas the presence of Japanese MNCs enhanced the magnitude of spillovers from eastern Asian countries MNCs. These results support regionalism in eastern Asian economies, including Japan. JEL classification: F23, O14

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Knowledge Spillovers from Foreign Direct Investment and the Role of Local R&D Activities: Evidence from Indonesia

Cited by 82 publications

References 39 publications

Foreign direct investment and regional economic development in Russia: an econometric assessment

Foreign direct investment and regional economic development in Russia: an econometric assessment

How do Chinese industries benefit from FDI spillovers?

Do FDI spillovers vary among home economies?: Evidence from Indonesian manufacturing

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