Does foreign direct investment stimulate new firm creation? In search of spillovers through industrial and geographical linkages

Sun L, Lee IH, & Hong E (2016). Does foreign direct investment stimulate new firm creation? In search of spillovers through industrial and geographical linkages. Small Business Economics: 1-19. DOI:10.1007/s11187-016-9803-0.

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Abstract

This paper examines the spillover effects of inward foreign direct investment (FDI) on the entrepreneurial activities of new firm creation through both industrial and geographical linkages. Using a dataset of 44,434 newly created small firms in 234 regions of South Korea in 2000–2004, this study finds that while the spillover impacts of FDI in the low-tech industry are positive and significant across almost all four possible combinations of the intra-/inter-regional and intra-/inter-sectoral channels, the impacts in the high-tech industry are largely intra-sectoral within the host region and across neighboring regions. Moreover, all statistically significant spillover effects follow an inverted ‘U’-shaped curvilinear trend.

Item Type: Article
Uncontrolled Keywords: Inward foreign direct investment; new firm creation; entrepreneurship; sectoral and spatial analysis
Research Programs: Water (WAT)
Depositing User: Romeo Molina
Date Deposited: 27 Sep 2016 13:29
Last Modified: 27 Mar 2017 08:12
URI: http://pure.iiasa.ac.at/13840

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