Technological Spillovers from Foreign Direct Investment—A Survey

Abstract

Increased foreign direct investment (FDI) flows have stimulated intensive debate and research on the impact of FDI on host economies. This paper surveys the substantial literature exploring FDI and spillover effects, summarizes the main findings from previous research, and identifies omissions in existing studies that should be included in future studies. The paper also reviews research on FDI in the People’s Republic of China (PRC) alongside the general literature on FDI. The PRC literature is useful in illuminating the likely direction of FDI research in developing countries, especially transition economies.