Foreign Direct Investment and spillovers: evidence from Indian manufacturing

This study is an attempt to empirically examine the spillover effects from the entry of foreign firms using a firm-level data of Indian manufacturing industries. Firm-level data of Indian manufacturing industries is used for the period 1994–2002. We consider both the horizontal and vertical spillover effects of FDI. Consistent with the results of the previous studies, we find no evidence of horizontal spillover effects. On the contrary, we find negative vertical spillover effects.