Measuring the Determinants of Backward Linkages from FDI in Developing Economies : Is it a Matter of Size?

Sanchez-Martin, Miguel Eduardo ; De Pinies, Jaime ; Antoine, Kassia

World Bank Group, Washington, DC

关键词: AUTOMOBILE;    AVAILABILITY OF DATA;    BENCHMARK;    BENCHMARKING;    BRANCH;   

DOI  :  10.1596/1813-9450-7185
RP-ID  :  WPS7185

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The main focus of the paper is themeasurement of the potential for externalities related toforeign direct investment. A series of novel proxies aredrawn from the Enterprise Survey database of the WorldBank-IFC and tested against hypotheses considered in theforeign direct investment literature. Using these proxies,an econometric assessment of the determinants of backwardlinkages in developing economies is presented. The resultsshow that export-oriented foreign direct investment, whollyowned subsidiaries (as opposed to joint ventures), andforeign owned firms relying on foreign technologies are lesslikely to develop links with domestic companies. Inaddition, the analysis finds that some sectors (food, wood,auto, and auto-parts) are more prone than others (textilesand electronics) in developing backward linkages. Apart fromthe type of foreign direct investment and sector-specificcharacteristics, the size of the host economy matters.Foreign owned subsidiaries in most service orientedCaribbean islands buy a low percentage of inputs fromdomestic firms. This may be because in small islands thereare not enough local suppliers with sufficient quality andcapacity to meet the demands of multinationals. However, thepaper presents the case of the Dominican Republic, thelargest economy in the Caribbean, which has struggled todevelop backward linkages because of the relative isolationof special economic zones from the rest of the economy.