ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Technology Diffusion through Foreign Direct Investment

This study examines technology diffusion resulting from foreign direct investment in the domestic manufacturing sector in India, by employing unit-level panel data from 2000 to 2007, covering all medium- and large-size manufacturing enterprises. The attempt is to empirically capture evidence of FDI technology spillover effects through two key mechanisms: horizontal spillover and vertical spillover. Vertical spillover effects can be further divided into backward linkages and forward linkages. Technology diffusion can also be the result of both short- and long-term spillover effects.
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