Foreign Direct Investment, Technology Diffusion, and Host Country Productivity Growth

Abstract

Hongshik Lee, Joonhyung Lee, and Hyuk-hwang Kim investigate whether foreign direct investment (FDI) has statistically significant effects on host countries’ economic performance, such as total factor productivity. This paper evaluates whether these spillover effects depend on the sending countries’ income levels, and shows that the impacts of FDI from developed countries, North–South effects, are more prevalent, but not the South–South effects.