Quotation Fornero, Jorge, Tondl, Gabriele. 2010. Sectoral productivity and spillover effects of FDI in Latin America. FIW Working Papers no.53, August 2010.




Empirical studies analysing productivity effects of inward FDI in Latin America (LA) are inconclusive. We argue that investigating aggregate FDI masks interesting effects of FDI that take place within and across sectors. Moreover, the potential of FDI to generate productivity effects differs across sectors. For these reasons and because sectoral FDI intensities vary significantly among LA countries and change over time, we investigate the productivity effects of FDI in eight different sectors including the primary sector, manufacturing and services. Besides FDI, sector-specific institutional factors, education and a sector's export share are considered as control variables. Given the likely endogeneity of variables, a GMM system estimation approach is used. The results indicate that positive productivity effects can be found in all sectors, although they may depend on specific conditions or are limited to a certain time period. Direct productivity effects are highest in the primary sector (agriculture, mining and petroleum production) and in financial services. In contrast, FDI in manufacturing and in transport and telecommunications generates productivity spillovers to nearly all other sectors.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Sectoral productivity and spillover effects of FDI in Latin America
Title of whole publication FIW Working Papers no.53, August 2010
Year 2010
URL http://www.fiw.ac.at/fileadmin/Documents/Publikationen/Working_Paper/N_053-Tondl_Fornero.pdf


Tondl, Gabriele (Details)
Fornero, Jorge (Central Bank of Chile, Chile)
Institute for International Economics IN (Details)
Europainstitut (Badinger) (Former organization)
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