Management Papers
Document Type
Journal Article
Date of this Version
6-1999
Publication Source
American Economic Review
Volume
89
Issue
3
Start Page
605
Last Page
618
DOI
10.1257/aer.89.3.605
Abstract
Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant productivity (the 'own-plant' effect), but this relationship is only robust for small enterprises. They then test for spillovers from joint ventures to plants with no foreign investment. Foreign investment negatively affects the productivity of domestically owned plants. The net impact of foreign investment, taking into account these two offsetting effects, is quite small. The gains from foreign investment appear to be entirely captured by joint ventures.
Recommended Citation
Aitken, B. J., & Harrison, A. E. (1999). Do Domestic Firms Benefit From Direct Foreign Investment? Evidence From Venezuela. American Economic Review, 89 (3), 605-618. http://dx.doi.org/10.1257/aer.89.3.605
Date Posted: 27 November 2017
This document has been peer reviewed.