Foreign Ownership and Productivity Growth: Firm Level Evidence from Cameroon
Date
2021-05-04
Authors
Njikam, Ousmanou
Leudjou, Roland Rostant Njiteu
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
Using a panel data set on Cameroonian manufacturing firms from 1993 to 2005, this
paper evaluates the direct and indirect effects of the presence of foreign ownership
on the productivity growth of local firms. We investigate spillovers through horizontal
and backward linkages, differentiated by the country of origin of foreign investors.
The paper also investigates whether and how the absorptive capacity of Cameroonian
indigenous firms moderates the effect of foreign presence on productivity. Controlling
for the degree of competition, our results indicate that foreign firms perform better
than Cameroonian indigenous firms. We find evidence of negative intra- and interindustry spillovers. The analysis also produces evidence of negative spillovers from
American, European and Asian affiliates through backward linkages. These negative
horizontal and vertical productivity spillovers are mainly due to the limited absorptive
capacity of Cameroonian firms, i.e., firms with the highest levels of absorptive capacity
suffer the less from foreign presence. The results are robust to the use of different
specifications.
Description
Keywords
Productivity , Foreign ownership , Foreign origin , Spill over