Spillovers of foreign direct investment and their effect on exports: An empirical application in an emerging country

Abstract

This paper investigates, for the first time in the Colombian case, the indirect effects of spillovers from foreign direct investment (fdi) on the exports of national companies. At an empirical level, we used a convenience sample made of 32 exporting companies, 14 foreign affiliates, and 18 domestic companies, which maintained continuity at about 60% of the total value of the national exportable supply in the 2007- 2016 period. By using a panel of data with fixed effects, we show that the positive effects of the inflow of fdi on the export of local companies are more associated with reaction mechanisms for the protection of their international markets from the so-called competition effect, and not with the export learning processes due to the knowledge, the technology, and the experience that foreign companies possess.