Winkler, Deborah2013-09-042013-09-042013-04https://hdl.handle.net/10986/15570Using newly collected survey data on direct supplier-multinational linkages in Chile, Ghana, Kenya, Lesotho, Mozambique, Swaziland, and Vietnam, this paper first evaluates whether foreign investors differ from domestic producers in terms of their potential to generate positive spillovers for local suppliers. It finds that foreign firms outperform domestic producers on several indicators, but have fewer linkages with the local economy and offer less supplier assistance, resulting in offsetting effects on the spillover potential. The paper also studies the relationship between foreign investor characteristics and linkages with the local economy as well as assistance extended to local suppliers. It finds that foreign investor characteristics matter for both. The paper also examines the role of suppliers' absorptive capacities in determining the intensity of their linkages with multinationals. The results indicate that several supplier characteristics matter, but these effects also depend on the length of the supplier relationship. Finally, the paper assesses whether assistance or requirements from a multinational influence spillovers on suppliers. The results confirm the existence of positive effects of assistance (including technical audits, joint product development, and technology licensing) on foreign direct investment spillovers, while the analysis finds no evidence of demand effects.en-USCC BY 3.0 IGOAUDITSCATERINGCOMPETITORDEVELOPING COUNTRIESDIRECT FOREIGN INVESTMENTDOMESTIC ECONOMYDOMESTIC FIRMDOMESTIC FIRMSDOMESTIC MARKETDOMESTIC SUPPLIERDOMESTIC SUPPLIERSECONOMIC DEVELOPMENTECONOMIC POLICYEMERGING MARKETEMERGING MARKET ECONOMIESEMPLOYMENTEQUIPMENTEXPORT MARKETEXPORT SHAREEXPORTERSFDIFIRM SIZEFIRMSFOREIGN AFFILIATESFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN FIRMFOREIGN FIRMSFOREIGN INVESTMENTFOREIGN INVESTORFOREIGN INVESTORSFOREIGN OWNERSHIPFOREIGN TECHNOLOGYFOREIGN-OWNED FIRMSGLOBAL ECONOMYHOME COUNTRIESHOME COUNTRYHOST COUNTRIESHOST COUNTRYHUMAN CAPITALINCOMEINDUSTRIAL DEVELOPMENTINTER-FIRM LINKAGESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINVENTORYINVESTMENT PROMOTIONJOINT VENTURESKNOWLEDGE DIFFUSIONLEASINGLICENSINGLOCAL ECONOMYLOCAL MARKETLOW-INCOME COUNTRIESMANUFACTURING FIRMSMANUFACTURING SECTORMARKET FORCESMARKET SEGMENTATIONMARKET SHAREMEDIUM-SIZED FIRMSMULTINATIONALMULTINATIONAL ENTERPRISESMULTINATIONALSNATURAL RESOURCESNEW PRODUCTSOPEN ECONOMIESOUTPUTPOSITIVE COEFFICIENTPRODUCT QUALITYREGIONAL INTEGRATIONRETAILSALESSKILLED WORKERSSUBSTITUTESUPPLIERSUPPLIERSTAXTECHNOLOGY DIFFUSIONTECHNOLOGY GAPTECHNOLOGY GAPSTECHNOLOGY INTENSITYTECHNOLOGY SPILLOVERSTECHNOLOGY TRANSFERTOTAL SALESTRANSITION COUNTRIESTRANSITION ECONOMIESTURNOVERVERTICAL LINKAGESWorld Bank10.1596/1813-9450-6424