Business, Management and Accounting
4 years ago

Foreign investment may harm local firms, decreasing industry productivity.

SSRN Electronic Journal
Firm Heterogeneity and FDI-Related Productivity Spillovers: A Theoretical Investigation
Sajid Anwar, Sizhong Sun

Paper Summary

The article explores how foreign investment affects local companies. It suggests that when foreign companies come in, weaker local firms may survive, lowering overall industry productivity. This can lead to no or negative effects on local firms' productivity, regardless of the type of foreign investment.

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