Does FDI Spur Productivity,Knowledge Sourcing and Innovation by Incumbent Firms? Evidence from Manufacturing Industry in Estonia

摘要

He existing empirical evidence base on the effects of foreign direct invest-ments (FDI) on domestic firms is, at best, limited. There are many papers attempting to study the effects of entry of foreign-owned firms on local incumbents, i.e. the spillovers of FDI. However, this type of study is difficult. The researcher needs to account for likely econometric problems of reverse causality, endogeneity of FDI, endogeneity of inputs in estimation of the production function, heterogeneity of effects, lack of good instruments or natural experiments for the identification of causal relationships.