Foreign direct investment, technology sourcing and reverse spillovers

Driffield, Nigel and Love, James H. (2003). Foreign direct investment, technology sourcing and reverse spillovers. Manchester School, 71 (6), pp. 659-672.


Recent theoretical work points to the possibility of foreign direct investment motivated not by 'ownership' advantages which may be exploited by a multinational enterprise but by the desire to access the superior technology of a host nation through direct investment. To be successful, technology sourcing foreign direct investment hinges crucially on the existence of domestic-to-foreign technological externalities within the host country. We test empirically for the existence of such 'reverse spillover' effects for a panel of UK manufacturing industries. The results demonstrate that technology generated by the domestic sector spills over to foreign multinational enterprises, but that this effect is restricted to relatively research and development intensive sectors. There is also evidence that these spillover effects are affected by the spatial concentration of industry, and that learning-by-doing effects are restricted to sectors in which technology sourcing is unlikely to be a motivating influence.

Publication DOI:
Divisions: Aston Business School > Economics finance & entrepreneurship
Uncontrolled Keywords: foreign direct investment,superior technology,direct investment,technology sourcing foreign direct investment,UK,manufacturing industries,spills over,foreign multinational enterprises,Economics and Econometrics
Full Text Link: ... 853357/abstract
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
Published Date: 2003-12
Authors: Driffield, Nigel
Love, James H.

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