Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/106206 
Year of Publication: 
2015
Series/Report no.: 
Kiel Working Paper No. 1981
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
This paper analyzes the horizontal productivity effects of foreign direct investment (FDI) from industrialized and developing countries in 10 sub-Saharan African countries. We establish a unique data set by combining data from the World Bank Enterprise Surveys that allow us to distinguish between foreign investors from sub-Saharan Africa, Asia, Europe, the Middle East, and North Africa. We find strong evidence of horizontal productivity spillovers to domestic firms derived from foreign-firm presence. However, these effects are clearly dependent on domestic firms' absorptive capacity. The largest productivity effects seem to be driven by investors from sub-Saharan Africa. Our analysis also shows that productivity effects differ according to the income level of host countries. Overall, the strongest productivity effects seem to materialize in lower-middle-income countries. These key findings emphasize the increasing importance of emerging investors, beyond the traditional players from industrialized countries, in sub-Saharan Africa.
Subjects: 
foreign direct investment
productivity
South-South firms
spillovers
sub-Saharan Africa
JEL: 
F23
Document Type: 
Working Paper

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