The importance of clusters for spillovers from foreign direct investment and technology sourcing

Abstract

This paper examines the link between cluster development and inward foreign direct investment. The conventional policy approach has been to assume that inward foreign direct investment (FDI) can stimulate significant clustering activity, thus generating significant spillovers. This paper, however, questions this and shows that, while clusters can generate significant productivity spillovers from FDI, this only occurs in pre-existing clusters. Further, the paper demonstrates that foreign-owned firms that enter clusters also appropriate spillovers when domestic firms undertake investment, raising the possibility that clusters are important locations for so called technology, or knowledge sourcing activities by MNEs. © 2006 Oxford University Press.

Publication DOI: https://doi.org/10.1093/cje/bei059
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
Additional Information: © The Author 2005. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.
Uncontrolled Keywords: Cluster,Foreign direct investment,Productivity spillovers,Economics and Econometrics
Publication ISSN: 1464-3545
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
http://cje.oxfo ... stract/30/2/277 (Publisher URL)
PURE Output Type: Article
Published Date: 2006-03-01
Published Online Date: 2005-08-09
Authors: De Propris, Lisa
Driffield, Nigel (ORCID Profile 0000-0003-1056-3117)

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