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FDI, Global Value Chains, and Local Sourcing in Developing Countries
Author:
Vito Amendolaginenull

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,
Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
,
Roberta Rabellottinull

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Marco Sanfilipponull

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Adnan Sericnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 284
Language:
English
Publication Date:
21 Dec 2017
DOI:
https://doi.org/10.5089/9781484335109.001
ISBN:
9781484335109
ISSN:
1018-5941
Pages:
40
Keywords:
WP; firm; global value chain; investor; supplier; Foreign Direct Investment; Global Value Chains; Local Sourcing; Africa; Vietnam; firm propensity; GVC involvement; firm level; foreign investor; FDI spillover; GVC position; GVC indicator; Production growth; Exports; Foreign corporations; Global; Sub-Saharan Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The local sourcing of intermediate products is one the main channels for foreign direct investment (FDI) spillovers. This paper investigates whether and how participation and positioning in the global value chains (GVCs) of host countries is associated to local sourcing by foreign investors. Matching two firm-level data sets of 19 Sub-Saharan African countries and Vietnam to country-sector level measures of GVC involvement, we find that more intense GVC participation and upstream specialization are associated to a higher share of inputs sourced locally by foreign investors. These effects are larger in countries with stronger rule of law and better education.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2017: Issue 284