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Robert Genthner
''What happens to FDI spillovers when input-output tables go granular?''
( 2021, Vol. 41 No.3 )
Multinational enterprises affect the productivity of domestic firms through FDI spillovers, especially when these firms use similar technology. The impact of spillovers varies with the technological distance between industries. More granular measurement of trade linkages across industries allows for the estimation of an additional intra-sectoral vertical component within two-digit sectors, which was part of the aggregated horizontal spillover effect before. Using Indonesian firm data reveals substantial effect heterogeneity. Horizontal spillovers within the same three-digit industry are negative, while intra-sectoral vertical spillovers across industries are positive and large in magnitude.
Keywords: FDI, spillovers, aggregation, Indonesia
JEL: F2 - International Factor Movements and International Business: General
C4 - Econometric and Statistical Methods: Special Topics
Manuscript Received : Jul 18 2021 Manuscript Accepted : Sep 18 2021

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