World Economy and Policy 2023, 2023(2):4 | DOI: 10.18267/j.wep.186

Spillover Effects from Multinational Enterprises: A Literature Review

Petr ©melc
Prague University of Economics and Business

Multinational enterprises play a significant role in the global economy. Their activities can have positive impacts on host countries as these companies tend to bring new capital, technology, and knowledge. Nevertheless, negative effects linked to their presence occur as well. Most studies focus on the overall impact of FDI on economic growth. In this paper, we go beyond this relationship and examine the literature describing specifically the indirect impacts of the activities of multinational corporations on host economies, the so-called spillover effects. We highlight the most relevant studies on this topic. Spillover effects occur both across and within industries and can significantly increase the productivity of domestic companies. The magnitude of these impacts is, however, significantly dependent on the level of development of the host economy and the absorptive capacity of local companies.

Keywords: Economic Growth, Foreign Direct Investment, Global Economy, Multinational entreprises, Spillover Effects.

Multinational enterprises play a significant role in the global economy. Their activities can have positive impacts on host countries as these companies tend to bring new capital, technology, and knowledge. Nevertheless, negative effects linked to their presence occur as well. Most studies focus on the overall impact of FDI on economic growth. In this paper, we go beyond this relationship and examine the literature describing specifically the indirect impacts of the activities of multinational corporations on host economies, the so-called spillover effects. We highlight the most relevant studies on this topic. Spillover effects occur both across and within industries and can significantly increase the productivity of domestic companies. The magnitude of these impacts is, however, significantly dependent on the level of development of the host economy and the absorptive capacity of local companies.

Published: September 5, 2023  Show citation

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©melc, P. (2023). Spillover Effects from Multinational Enterprises: A Literature Review. World Economy and Policy, 2023(2), 4. doi: 10.18267/j.wep.186
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    54. Petr ©melc obtained his Ph.D. in 2023 from the Prague University of Economics and Business. His research focuses on the role of foreign companies in host economies. In his dissertation thesis, he investigated the obstacles to the operation of foreign companies in Cuba, while simultaneously examining the impacts of the presence of foreign companies on the local economy. He works as an expert on EU economic policy at the Permanent Representation of the Czech Republic to the EU in Brussels. Previously, he worked as an expert on EU relations at the Czech National Bank.

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