Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta‐Regression Analysis

Abstract

Abstract This paper reviews the empirical literature on technology spillovers from foreign direct investment (FDI) in developing countries. Our meta‐analysis uses a sample of 32 studies to determine what aspects of study design and data characteristics explain the magnitude, significance, and direction of spillovers from FDI. Results suggest that spillover effects are more pronounced when studies measure the effect of FDI spillovers on output, and are more likely to be significant and positive for Asian countries. Results also highlight the possibility that the documented spillover effects from FDI in developing countries may be partly a product of model misspecification.