Attempts to measure the spillover effects of multinational enterprises on host countries have generally been corss-sectional and limited to labour productivity in manufacturing for a single country. Recent work in growth theory has measured the extent to which growth in total factor productivity...

Firms have different motives for investing abroad, most notably to exercise existing capabilities, but also to build new capabilities by accessing knowledge located abroad. Recognizing this heterogeneity helps determine whether foreign investments transfer technology to their host industries....