Abstract:FDI is expected to generate direct effects on the host country economy as well as indirect effects stemming from the increase in productivity and competitiveness of local producers. The latter will benefit from spillover effects arising from the establishing multinationals, through different channels or mechanisms. Determinant factors for the enactment of spillovers have been identified in the literature, but the role of government has been overlooked. In this study we compare FDI spillovers in China and Brazil at industry level, aiming at unveiling the influence of government in the configuration of spillover mechanisms and, consequently, in FDI impacts on local industries. Research comparing countries is more apt to reveal the subtleties of FDI spillover and micro-level analysis allows a deeper and clearer view of the mechanisms which enable the spillover process. Comparative historical analysis is the central mode of investigation, leading to a commitment to offering historically grounded explanations to important effects. The findings reveal the importance of governmental role in the achievement of positive FDI spillover effects and subsidize a preliminary causal analysis between government intervention and spillover mechanisms configuration.

Authors:Fleury, Afonso; Chen, Taotao; Fleury, Maria Tereza; Chen, Xiao; Calixto, Cyntia; Savoy, Claudia; Liu, Shichang; Avelline, Carlos

AIB Conference (2014 Vancouver).