RIEB Seminar (Jointly supported by: Rokko Forum / Kobe University Center for Social Systems Innovation)
A Review of the Literature on GVC and FDI: Towards an Integrated Approach
Although information spillovers from internationally dispersed activities of multinational enterprises (MNEs) in developing countries are subjects of the literature on foreign direct investment (FDI) and global value chain (GVC), FDI and GVC studies are carried out
independently and separately. While GVC studies are largely descriptive and conceptual, FDI studies are quantitative with focus on the impact of FDI on productivity of local enterprises in developing countries. However, a review of the literature on GVC and FDI studies shows that
the two strands of studies are commonly interested not only in spillovers of technological and managerial knowledge but also in absorptive capacity of domestic firms and backward linkages between foreign firms and domestic firms. Therefore, this literature review argues that there is large room for empirical research to make new contributions to the literature on the impacts of FDI on industrial development in developing courtiers by incorporating the insightful perspective of GVC approach into empirically rigorous FDI studies.