| Abstract: |
Foreign Direct Investment (FDI) flows have increased substantially in the past
two decades. These developments have motivated the appearance of a large
number of empirical papers that test the expected benefits that FDI inflows
are assumed to bring to the host countries.We survey the recent theoretical
and empirical literature, but restrict our attention to the productivity
changes that are induced by increased FDI inflows. We review both the
aggregate productivity effects, as well as the spillover effects of FDI on
local firms. |