Foreign Direct Investment in the Real and Financial Sector of Industrial Countries 2003
DOI: 10.1007/978-3-540-24736-4_3
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Abstract: This paper suggests that the use of investment incentives focusing exclusively on foreign firms, although motivated in some cases from a theoretical point of view, is generally not an efficient way to raise national welfare. The main reason is that the strongest theoretical motive for financial subsidies to inward FDI n spillovers of foreign technology and skills to local industry n is not an automatic consequence of foreign investment. The potential spillover benefits are realized only if local firms have the… Show more

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Cited by 241 publications
(206 citation statements)
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“…Similarly, the human capital variable has a negative impact on income inequity, and this finding is robust under the different specifications. The literature shows that greater investment in human capital translates into a drop in income inequality, especially in developing economies (see Basu and Guariglia, 2007;Blomstrom and Kokko, 2003;Castelló and Doménech, 2002). This last finding is important, since education is highlighted by several studies as one of the most effective instruments for reducing poverty and inequality in developing economies, and should thus be treated as a relevant factor by public policymakers, especially when the policies concerned are redistributive in character.…”
Section: Resultsmentioning
confidence: 99%
“…Similarly, the human capital variable has a negative impact on income inequity, and this finding is robust under the different specifications. The literature shows that greater investment in human capital translates into a drop in income inequality, especially in developing economies (see Basu and Guariglia, 2007;Blomstrom and Kokko, 2003;Castelló and Doménech, 2002). This last finding is important, since education is highlighted by several studies as one of the most effective instruments for reducing poverty and inequality in developing economies, and should thus be treated as a relevant factor by public policymakers, especially when the policies concerned are redistributive in character.…”
Section: Resultsmentioning
confidence: 99%
“…However, knowledge transfer and spillovers are never unconditional. In the case of FDI, it is now widely recognised that technology or productivity spillovers are not automatic consequences of the entry or presence of multinational enterprises (Blomström and Kokko 2003;Kokko and Kravtsova, 2006). Rather, they depend on factors such as the technology gap between foreign and local firms and the absorptive capabilities of local firms Zanfei, 2003 andSawada, 2010).…”
Section: Introductionmentioning
confidence: 99%
“…Over the second half of the 1990's Sweden was the seventh largest recipient of foreign direct investment (FDI) globally and saw the percentage ratio of foreign to domestically owned firms rise by 10 percentage points to 27 per cent between 1990 and 2000 (Blomström and Kokko, 2003). Within the data we use in this study we calculate that the number of foreign-owned firms increased by 60 per cent between 1990 and 2001 (to 597 firms by 2001).…”
Section: Section 1: Introductionmentioning
confidence: 99%