Productivity and foreign direct investment – evidence from Mexico

Concentrates on identifying the mechanisms by which foreign investment affects productivity in recipient countries. Conducts a firm-level study of manufacturing plants in Mexico and test for performance differences embodied in factor productivity between domestic and foreign (majority and minority) owned plants. In addition checks for the existence of spillovers at the industry level due to the presence of multinational corporations. In contrast to earlier studies finds no evidence of spillovers but does find a strong direct effect in the form of higher levels of productivity in firms with foreign ownership.