This article undertakes a critical review of existing spillover analyses and proposes a unique analytical framework for examining technological spillovers in a manufacturing industry setting. The proposed framework overlaps three different literature strands: cluster and network dynamics, technological innovations and spillover literature. It enables to determine the extent to which multinational presence in a host country stimulates spillover occurrence to local firms as well as their nature. Using this framework, the kinds of spillovers and the channels through which they occur most can be equally determined – this is particularly relevant for policy intervention in a technically backward country. Finally, it allows determination of factors and conditions under which spillovers from multinationals occur.
Aitken, B. and Harrison, A.E.1992: Does proximity to foreign firms induce technology spillovers?Mimeo, World Bank and International Monetary Fund .
2.
Aitken, B.J. and Harrison, A.E.1999: Do domestic firms benefit from direct foreign investment? Evidence from Venezuela , The American Economic Review89, 605–18 .
3.
Aitken, B. , Hanson, G.H. and Harrison, A.E.1997: Spillovers, foreign investment and export behaviour , Journal of International Economics43, 103–32 .
4.
Anderson, U. and Forgren, U.2002: The strategic impact of external networks: Subsidiary performance and competence development in the multi-national corporation , Strategic Management Journal23, 979–96 .
5.
Aoki, M.2001: Towards a comparative institutional analysis. MIT Press .
6.
Aghion, P. and Howitt, P.1990: A model of growth through creative destruction , Economica60, 323–51 .
7.
Bain, J.1968: Industrial Organisation. John Wiley and Sons .
8.
Bell, M. and Pavitt, K.1993: Technological accumulation and industrial growth: Contrasts between developed and developing countries , Industrial and Corporate Change2, 157–210 .
9.
Benhabib, J. and Spiegel, M.1994: The role of human capital in economic development: Evidence from aggregate cross-country data , Journal of Monetary Economics34, 143–73 .
10.
Birkinshaw, J.M. and Hood, N.1998: Multinational subsidiary evolution: Capability and charter change in foreign-owned subsidiary companies , Academy of Management Review, 23, 173–95 .
11.
Blalock, G. and Gertler, P.2004: Welfare gains from foreign direct investment through technology transfer to local suppliers. Cornell University , Mimeo.
12.
Blomstrom, M. and Kokko, A.1998: Multinational corporations and spillovers , Journal of Economic Surveys12, 247–78 .
13.
Blomstrom, M. and Pearson, H.1983: Foreign investment and spillover efficiency in an under-developed economy: Evidence from the Mexican manufacturing industry , World Development11, 493–501 .
14.
Blomstrom, M. and Sjoholm, F.1999: Technology transfer and spillovers: Does local participation with multinationals matter?European Economic Review43, 915–23 .
15.
Brusco, S. and Sabel, C.1981: Artisan production and economic growth. In Wilkinson, F. , editor, The dynamics of labour market segmentation. Academic Press , 99–114.
16.
Cantwell, J.A.1989: Technological innovation and multi-national corporations. Blackwell .
17.
Cantwell, J.A.1995: The Globalisation of technology: What remains of the product cycle model , Cambridge Journal of Economics19, 155–74 .
18.
Cantwell, J.A. and Narula, R.2001: The eclectic paradigm in the global economy , International Journal of the Economics of Business8, 155–72 .
19.
Caves, R.1974: Multinational firms, competition and productivity in host-country markets , Economica41, 176–93 .
20.
Coase, R.1937: The nature of the firm , EconomicaIV, 386–405 .
21.
Coe, D.T. and Helpman, E.1995: International R&D spillovers , European Economic Review39, 859–87 .
22.
Coe, D.T. , Helpman, E. and Hoffmaister, A.W.1997: North south R&D spillovers , Economic Journal107, 134–49 .
23.
Cohen, W.M. and Levinthal, D.A.1990: Absorptive capacity: A new perspective on learning and innovation , Administrative Science Quarterly35, 128–52 .
24.
Crone, M. and Watts, H.2003: The determinants of regional sourcing by multinational manufacturing firms: Evidence from Yorkshire and Humberside , UK, European Planning Studies11, 717–37 .
25.
Djankov, S. and Hoekman, B.1998: Foreign investment and productivity growth in Czech Enterprises . World Bank Economic Review: World Bank .
26.
Doner, R.2001: Institutions and the tasks of economic upgrading . Paper prepared for delivery at the 2001 annual meeting of the American Political Science Association, San Francisco.
27.
Dunning, J.H.1993: Multinational enterprises and the global economy. Addison Wesley .
28.
Dunning, J.H.1997: Alliance capitalism and global business. Routledge .
29.
Dunning, J.H.2000: Regions, globalisation, and the knowledge economy: The issues xtated. In Dunning J. , editor, Regions, globalization, and the knowledge economy. Oxford University Press , 7–40.
30.
Fransman, M.1984: Technological capability in the third world: An overview and introduction. In Fransman, M. and King, K. , editors, Technological capability in the third world. The Macmillan Press Ltd .
31.
Freeman, C.1987: The case for technological determinism. In Finnegan, R.Salaman, G. and Thompson, K. , editors, Information technology: Social issues. Hodder and Stoughton , 5–18.
32.
Freeman, C.1991: Networks of innovators: A synthesis of research issues , Research Policy20, 499–514 .
33.
Freeman, C.1995: The national system of innovation in historical perspective , Cambridge Journal of Economics19, 5–24 .
34.
Gachino, G. 2006: Foreign direct investment, spillovers and innovation. The case of Kenyan manufacturing industry. Ph.D. Unpublished Thesis, University of Maastricht.
35.
Gereffi, G.1994: The organisation of buyer-driven global commodity chains: How U.S. retailers shape overseas production networks. In Gereffi, G. and Korzeniewicz, M. editors, Commodity chains and global capitalism. Praeger , 95–122.
36.
Gereffi, G.2002: Intenational competitiveness in the global apparel commodity chain , International Journal of Business and Society3, 1–23 .
37.
Gorg, H. and Strobl, E.2001: Multinational companies and productivity spillovers: A meta-analysis , Economic Journal111, 723–39 .
38.
Gorg, H. and Greenaway, D.2004: Much ado about nothing? Do domestic firms really benefit from foreign direct investment?World Bank Research Observer19, 171–97 .
39.
Globerman, S.1979: Foreign direct investment and spillover efficiency benefits in Canadian manufacturing industries , Canadian Journal of Economics12, 42–56 .
40.
Grossman, G.M. and Helpman, E.1991a: Trade, knowledge spillovers and growth , European Economic Review35, 517–26 .
41.
Grossman, G.M1991b: Innovation and growth in the global economy. MIT Press .
42.
Grossman, G.M1995: Technology and trade. In Grossman, G. and Rogoff, K. , editors, Handbook of international economics. Elsevier Science .
43.
Haddad, M. and Harrison, A.1993: Are there spillovers from direct foreign investment? Evidence from panel data for Morocco , Journal of Development Economics42, 51–74 .
44.
Hirschman, A.O.1958: The strategy of economic development. Yale University Press .
45.
Holm, U. and Pedersen, T.2000: The emergence and impact of MNC centres of excellence: A subsidiary perspective. Macmillan .
46.
Hood, N. and Young, S.1976: US investment in Scotland: Aspects of the branch factory syndrome , Scottish Journal of Political Economy, 23, 279–94 .
47.
Javorcik, B.S.2004: Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages . American Economic Review93, 605–27 .
48.
Jovanovic, B.1982: Selection and the evolution of industries . Econometrica50, 649–70 .
49.
Kim, L.1999: Learning and innovation in economic development. Edward Elgar Publishing, Inc.
50.
Koizumi, T. and Kopecky, K. J.1977: Economic growth, capital movements and the international transfer of technical knowledge , Journal of International Economics7, 45–65 .
51.
Kraemer, K.L. and Dedrick, J.2003: The information technology sector and international competitiveness , International Journal of Business and Society4, 111–34 .
52.
Kugler, M.2006: Spillovers from foreign direct investment: Within or between industries?Journal of Development Economics80, 444–77 .
53.
Lall, S.1992: Technological capabilities and industrialization , World Development20, 165–86 .
54.
Lipsey, R.E. and Sjoholm, F.2005: The impact of inward FDI on host countries: Why such different answers? In Moran, T.H. , Graham, E.M. and Blomstrom, M. , editors, Does foreign direct investment development?Center for Global Development and Institute for International Economics , 23–43.
55.
Lucas, R.E.J.1988: On the mechanics of economic development , Journal of Monetary Economics22, 3–42 .
56.
Lundvall, B.A.1992: National systems of innovation: Towards a theory of innovation and interactive learning. Francis Pinter .
57.
Lundvall, K. and Battese, G.E.2000: Firm size, age and efficiency: Evidence from Kenyan manufacturing firms , The Journal of Development Studies36, 146–63 .
58.
Marshall, A.1890: Principles of economics: An introductory volume. Macmillan .
59.
McCann, P. and Sheppard, S.2003: The rise, fall and rise again of industrial location theory , Regional Studies, 37, 649–63 .
60.
Mytelka, L.K.1985: Stimulating effective technology transfer: The case of textiles in Africa. In Rosenberg, N. and Fribchtak, C. , editors, International technology transfer77–126. Praeger .
61.
Nelson, R.R.1993: National innovation systems: A comparative analysis. Oxford University Press .
62.
Nelson, R.R. and Winter, S.G.1982: An evolutionary theory of economic change. Harvard University Press .
63.
Papanastassiou, M. and Pearce, R.1997: Technological sourcing and the strategic roles of manufacturing subsidiaries in the UK: Local competencies and global competitiveness , Management International Review8, 125–48 .
64.
Pearce, R.D.1989: The internationalization of Research and development by Multinational Enterprises. Macmillan .
65.
Pearce, R.D.1998: Multinational enterprises and technological spillovers. Harwood .
66.
Phelps, N.1993: Branch plants and the evolving spatial division of labour: A study of material linkage change in the northern region of England , Regional Studies, 27, 87–101 .
67.
Phelps, N. , Mackinnon, D.Stone, I. and Braidford, P.2003: Embedding the multinationals?: Institutions and the development of overseas manufacturing affiliates in Wales and North East England , Regional Studies37, 27–40 .
68.
Potter, J. , Moore, B. and Spires, R.2003: Foreign manufacturing investment in the United Kingdom and the upgrading of supplier practices , Regional Studies37, 41–60 .
69.
Piore, M.J. and Sabel, C.F.1984: The second industrial divide: Possibilities for prosperity. Basic Books .
70.
Piggozzi, B.W. and Bagchi-sen, S.1995: Impacts of acquisitions and new plants on the employment in US affiliates of foreign manufacturing of foreign manufacturing firms , Tijdschrift voor Economische en Sociale Geografie86, 328–38 .
71.
Posner, M.V.1961: International trade and technological Progress , Oxford Economic Papers13, 323–41 .
72.
Rasiah, R.1995: Foreign capital and industrialisation in Malaysia. Macmillan .
73.
Rasiah, R.2005: Foreign firms, technological capabilities and economic performance: Evidence from Africa, Asia and Latin America. Edward Elgar Publishing .
74.
Romer, P.M.1990: Endogenous technological change , Journal of Political Economy98, 71–102 .
75.
Rosenberg, N.1982: Inside the black box. Cambridge University Press .
76.
Saggi, K.2002: Trade, foreign direct investment, and international technology transfer: A survey , The World Bank Research Observer, 17, 191–235 .
77.
Saxenian, A.L.1991: The origins and dynamics of production networks in Silicon Valley , Research Policy20, 423–37 .
78.
Scherer, F.M.1973: The determinants of industry plant sizes in six nations , Review of Economics and Statistics55, 135–75 .
79.
Sjoholm, F.1997: Technology gap, competition and spillovers from direct foreign investment: Evidence from established data , Journal of Development Studies36, 53–73 .
80.
Takii, S.2001: Productivity spillovers and characteristics of foreign multinational plants in Indonesian manufacturing 1990–95. International Center for the Study of East Asian Development .
81.
UNCTAD. 2006: FDI from developing and transition economies: Implications for development. World Investment Report, United Nations, New York and Geneva .
82.
Vernon, R.1966: International investment and inter-national trade in the product cycle , Quarterly Journal of Economics80, 190–207 .
83.
Williams, D.2003: Explaining employment changes in foreign manufacturing investment in the UK , International Business Review, 12, 479–97 .
84.
Williamson, O.E.1985: The economic institutions of capitalism: firms, markets and relational contracting. Free Press .
