Foreign direct investment (FDI) can benefit domestic firms in emerging markets. By studying data from 17 countries, researchers found that FDI has positive effects on domestic firms' efficiency. Backward spillovers, like supplying or exporting to foreign firms, are consistently positive. Horizontal spillovers are mostly insignificant, except for older firms and those in the service sector. Forward spillovers, from purchasing or importing, are positive for older and service sector firms. The strength of FDI spillovers is not affected by the business environment or technology level. Spillovers vary by firm size, age, sector, and absorptive capacity. Distance from the efficiency frontier can dampen spillovers in manufacturing, and firms with more educated workers are more productive but do not necessarily benefit more from FDI spillovers.