FDI, Global Value Chains, and Local Sourcing in Developing Countries

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. Matchin...

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Bibliographic Details
Main Author: Amendolagine, Vito
Other Authors: Presbitero, Andrea, Rabellotti, Roberta, Sanfilippo, Marco
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2017
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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653 |a Labor Demand 
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653 |a Long-term Capital Movements 
653 |a Depository Institutions 
653 |a International trade 
653 |a Vacancies 
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653 |a Mortgages 
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653 |a Financial Crises 
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520 |a 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