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Foreign Direct Investment and Export Spillovers:
How Do Export Platforms Fare?

Frances Ruane and Julie Sutherland

Abstract

Should economies that promote themselves as export platforms for FDI be expected to experience relatively high levels of export spillovers from foreign to host-country enterprises? To investigate how export decisions of host-country enterprises are associated with the presence and export intensity of foreign-owned enterprises (FOEs) in an export-platform economy we use enterprise-level data for the manufacturing sector in Ireland. We postulate that export spillovers from FOEs are dependent upon the sectoral presence and export intensity of FOEs, so that third country export-platform FDI may not result in positive export spillovers to host-country enterprises. We find that the decision by host-country enterprises to enter the export market is positively associated with the presence of FOEs in their sector. However, the export intensity of host-country enterprises is negatively associated with the export sales ratios of FOEs, a result that contrasts with evidence of positive FOE export intensity spillovers in most previous empirical studies.

Keywords: FDI, export spillovers, export platforms.
JEL Classification: F14, F23.

Last updated 28 August 2014 by IIIS (Email).