New and Improved: Does FDI Boost Production Complexity in Host Countries?

Daniela Maggioni, Beata S. Javorcik, Alessia Lo Turco

Research output: Contribution to journalArticlepeer-review

30 Citations (Scopus)

Abstract

This article examines the relationship between the presence of foreign affiliates and product upgrading by Turkish manufacturing firms. The analysis suggests that Turkish firms in sectors and regions more likely to supply foreign affiliates tend to introduce more complex products, where complexity is captured using a measure developed by Hidalgo and Hausmann (). This finding is robust to controlling for omitted variables, sample selection and potential simultaneity bias. It is also in line with the view that inflows of foreign direct investment stimulate upgrading of indigenous production capabilities in host countries.
Original languageEnglish
Pages (from-to)2507-2537
Number of pages31
JournalEconomic Journal
Volume128
DOIs
Publication statusPublished - 2018

Keywords

  • Backward Linkages
  • FDI
  • Product Innovation
  • Production Upgrading
  • Turkey

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