Journal
STRUCTURAL CHANGE AND ECONOMIC DYNAMICS
Volume 53, Issue -, Pages 388-401Publisher
ELSEVIER
DOI: 10.1016/j.strueco.2019.06.004
Keywords
Foreign direct investment; Spillovers; Pavitt taxonomy; Inter-sectoral linkages; FDI heterogeneity; Italy
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Locations all over the world compete to attract Foreign Direct Investment (FDI) in order to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI, little is known about (1) its effect on neighbouring regions and (2) the type of FDI generating the strongest learning effects. To fill this gap, we investigate the FDI-innovation relationship in Italian provinces. By adopting the Pavitt taxonomy of manufacturing sectors, we suggest that only specific categories of FDI benefit local economies, whilst other types may produce negative outcomes. The evidence on the spatial implications of FDI remains limited. (C) 2019 Elsevier B.V. All rights reserved.
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