1 / 11

FDI & Local Linkages in Small Island Economies: Fiji & Samoa

FDI & Local Linkages in Small Island Economies: Fiji & Samoa. Robert Read & Nigel Driffield Universities of Lancaster & Aston, UK. FDI Inflows to Small States. Hypotheses : They receive less than proportionate FDI inflows because of their size . x

cutter
Download Presentation

FDI & Local Linkages in Small Island Economies: Fiji & Samoa

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FDI & Local Linkages in Small Island Economies:Fiji & Samoa Robert Read & Nigel Driffield Universities of Lancaster & Aston, UK

  2. FDI Inflows to Small States Hypotheses: • They receive less than proportionate FDI inflows because of their size. x • They receive less than proportionate FDI inflows because of their incomes.  • FDI inflows are associated with key growth sectors – tourism, services, resources. 

  3. FDI & Linkage Creation Direct Linkages • Employment & Technology • Vertical (Upstream & Downstream) Indirect Linkages (Spillovers) • Technology & Knowledge • Agglomeration • Competition

  4. Case Study Methodology Five case studies of firms in Fiji and Samoa, 2003 - natural resource processing and manufacturing. • Firm-level questionnaires and interviews. • Interviews with ministries, agencies and other local institutions.

  5. Employment & Technology Impacts determined by relative labour intensity and technological sophistication. Also constrained by skill shortages. • Natural Resources: Limited employment effects and standard technology. • Manufacturing: More substantial effects with some advanced technology.

  6. Vertical Linkages Upstream impact determined by input sources. Downstream impact limited by high export-orientation. • Natural Resources: Generally substantial upstream linkages, limited downstream. • Manufacturing: Export platform activity with few vertical linkages.

  7. Spillover (Indirect) Effects Some evidence of spillover effects but not always positive. • Technology & Knowledge: Limited by low labour turnover (unemployment). • Agglomeration: Some in manufacturing. • Competition: Evidence of positive (entry barriers) and negative effects (monopoly).

  8. Constraints on Linkage Creationin Small States • Level of development: Limits the type of linkages created. • Type of FDI inflows: - Resource FDI focused on local inputs. - Manufacturing FDI focused on employment. • Shallow economic structure: Limits the potential scope for linkages.

  9. General Constraints on Linkage Creation • The availability of local skills Limited labour with requisite skills – result of out-migration, lack of employment opportunities and insufficient training. • Policies to create local linkages Insufficient effort made to maximise linkage effects – excessive focus on attracting FDI, regardless of likely impacts.

  10. Conclusions • Small island states, such as those in the Pacific, can attract FDI inflows. • These FDI inflows can generate an array of local linkage and spillover effects. • These linkages have emerged in spite of the limited potential for their creation in small island states.

  11. Case Study Local Linkages

More Related