Do Domestic Firms Benefit from Foreign Direct Investment?

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This lecture delves into the spillover effects of Foreign Direct Investment (FDI) on domestic firms, exploring both horizontal (intra-industry) and vertical (inter-industry) impacts. Key topics include spillover mechanisms like employee mobility, competition, supply chain upgrades, and knowledge transfers. It also addresses challenges such as market displacement by MNEs and examines factors influencing the effectiveness of spillovers, including domestic absorptive capacity, MNE strategies,...