Does FDI generate technological spillovers in the host country? Evidence from patent citations

This paper explores the existence of technological spillovers coming from FDI in less developed host countries. Our results are based on a direct measure of technological flows across firms: patent citations. We find evidence supporting the idea that FDI exerts positive technological spillovers in the host country, although the results suggest that it may take about 8–9 years for these spillovers to occur. In addition, our results suggest that these spillovers are not homogeneous across all countries in the sample. While we find positive spillovers in South East Asian economies, this turns out not to be the case for South American economies.