Microeconomic mechanisms behind export spillovers from FDI: evidence from Bulgaria

Abstract

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Rules of origin and trade preference utilization among least developed countries

“…It is possible that some of the heterogeneity in the response across LDCs to the EU's rules of origin revision is driven by different openness to FDI. FDI has been shown to have positive spillover effects in local economies (Ciani & Imbruno, 2017; Kokko et al, 2001). Thus, the relaxation of rules of origin may result in lower levels of FDI as less local content is required in exported products, and this could have broad implications for local economies.…”

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“…Positive vertical spillovers call policies for strengthening of supplier-buyer relationship between local and multinationals. Ciani and Imbruno (2017) examine the spillover effects of FDI in Bulgaria focusing on the export performance of Bulgarian manufacturing firms. Using firm-level data for the period 2004-2006, they find positive forward spillover on export performance.…”

Enhancing the attractiveness of the island of Ireland to high-value Foreign Direct Investment

“…FDI projects, particularly greenfield investments, are linked to net job creation in host countries (see among others, Siedschlag and Tong Koecklin, 2019). 1 Furthermore, FDI generates wider benefits to the host economies via spillovers on productivity (Jude, 2016;Havranek and Irsova, 2011;Driffield and Lavoratori, 2020;Barrios et al, 2012;Haller, 2014;Di Ubaldo et al, 2018) and trade performance of domestic firms (Ciani and Imbruno, 2017;Bajgar and Javorcik, 2020;Di Ubaldo and Siedschlag, 2020). Driffield and Lavoratori (2020) find that productivity spillovers from foreign affiliates to domestic firms are larger in Northern Ireland than the average productivity spillovers in Great Britain.…”