Accueil ARTICLES Foreign Direct Investment and Productivity of Local Manufacturing Firms in the DRC: In Search of Intra-Industry Spillovers ?

Foreign Direct Investment and Productivity of Local Manufacturing Firms in the DRC: In Search of Intra-Industry Spillovers ?

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The expansion of domestic firms is an important objective for policymakers because the latter are regarded as key drivers of job creation and economic growth. Our goal in this paper is to investigate to what extent attracting high level of foreign direct investment (FDI) inflows may influence the productivity of local firms in the Democratic Republic of Congo (DRC). This paper uses the World Bank Enterprise Survey cross sectional data and applies state of art microeconometric techniques to quantify potential spillovers effects that may emerge because of the interaction between foreign owned firms and domestic firms. Our results show that foreign owned firms are more productive than their local counterparts. FDI has positive and significant effect on productivity of local firms in general. We find that large and medium sized firms have much higher productivity than small firms. Manufacturing firms based in Kisangani, Matadi and Kinshasa exhibit higher productivity than those located in Lubumbashi. The age of firms is not a significant factor in explaining productivity of local firms. Furthermore, we find evidence of negative but statistically insignificant intra-industry spillovers effects.

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Josué Diwa, Jean-Baptiste Ntagoma et Jean-Paul Tsasa