FDI spillovers in emerging markets

DRC Working Papers
Foreign Direct Investment in Emerging Markets
CENTRE FOR NEW AND EMERGING MARKETS
LONDON BUSINESS SCHOOL
No. 15

FDI Spillovers in Emerging Markets:
A Literature Review and New Perspectives
By
Klaus E. Meyer
Copenhagen Business School

Draft, March 2003
Do not quote

CNEM is a Development Research Centre supported by the UK Department for International Development

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Introduction: Spillovers in a Changing Global Economy
Macroeconomic perspectives
Knowledge spillovers
Inter-industry linkage effects
Competition and crowding out
Societal effects
Investor and project specific determinants of spillovers
Research Agenda

Acknowledgements: I thank Arie Lewin for stimulating this research, and Evis Sinani for her research assistance. Moreover, the following colleagues have been providing helpful comments: Saul Estrin,
Camilla Jensen, Mike Peng and participants of the JIBS conference ‘new frontiers in international business research’ at Duke University.

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Abstract
Multinational enterprises (MNEs) play a pivotal role in the development of many emerging markets, and have consequently received due attention by scholarly research in economics and by policy analysts. In contrast, international business scholars have been comparatively uninterested in analyzing this role of MNEs. Yet, they would have important contributions to make to these debates, in particular in two ways: Firstly, the management perspective is essential to understand the interaction between MNEs and their local environment. Secondly, the application of theories and research methodologies developed in management research provide new insights on the dynamics of MNEs in emerging markets.
The prime objective of this paper is thus to motivate international business scholars (beyond those working within a traditional economics paradigm) to engage in research on the role of FDI in emerging economy

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