FDI, global value chains, and local sourcing in developing countries

by Vito Amendolagine, Andrea F. Presbitero, Roberta Rabellotti, Marco Sanfilippo, and Adnan Seric

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

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Year of publication:	2017
Authors:	Amendolagine, Vito ; Presbitero, Andrea ; Rabellotti, Roberta ; Sanfilippo, Marco ; Seric, Adnan
Publisher:	[Washington, DC] : International Monetary Fund
Subject:	Foreign Direct Investment \| Global Value Chains \| Local Sourcing \| Africa \| Vietnam \| Auslandsinvestition \| Foreign investment \| Viet Nam \| Entwicklungsländer \| Developing countries \| Betriebliche Wertschöpfung \| Value creation \| Globale Wertschöpfungskette \| Global value chain \| Multinationales Unternehmen \| Transnational corporation \| Afrika \| Globalisierung \| Globalization \| Wertschöpfung \| Value added \| Internationale Produktion \| International production