Technological Capabilities and FDI-related Spillover: Evidence from Manufacturing Industries in Nigeria
A Y Dutse

Many studies provide evidences of the existence of FDI-related technology spillover effects, suggesting that FDI can act as a vehicle through which technologies and new ideas can be transferred to domestic firms in developing countries. However, some case studies and empirical researches find little evidence of a spillover effect arising from FDI inflow. These mixed empirical evidences imply that research needs to identify conditions under which spillovers actually occur. Accordingly, this study was conducted to explore the role of both subsidiary and indigenous firms’ intensity of investments in technological activities and capabilities on their ability to attract and generate, capture and absorb FDI-related technology spillover. In doing so the Nigeria’s manufacturing sector was targeted from which a sample was drawn. Data were collected through reliable-tested structured questionnaires and were analysed principally by using multiple correlation to establish association and regression to establish causality. By employing combined analytical approach, the research found positive and robust relationships between intensity of investments in technological capabilities vis-à-vis FDI-related technology spillover. The results also show that investments in R&D and acquisition of licensed technologies are the main drivers of spillover with subsidiaries contributing more to the process than indigenous firms.

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