Exploring Aggregate FDI Spillovers: Factors, Explanations, and Empirical Evidence
DOI:
https://doi.org/10.58932/MULE0003Keywords:
FDI, determinant factors, absorptive capacity, productivity, spilloversAbstract
This paper explores the aggregate spillover of FDI to domestic firms yielded positive results. We discuss the explanations for those theories and the empirical evidence already identified. Spillovers for FDI are dependent on many factors, often with undetermined impact. Absorptive capacity is a fundamental requirement of FDI spillover for domestic firms. The empirical studies finding that results show positive effects in respect of the remaining factors like as skilled labour, institutional quality, flexible labour market, and economic freedom. The result suggests that financial developed institutions, better quality infrastructure, and flexible labour markets attract foreign investors.
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