**<u>│</u> 9**

# **Box 1. How strong is the impact of foreign MNEs? Numbers from selected studies**

1. A 10% increase in foreign presence in customer sectors is followed by an **11%** average increase in productivity of domestic suppliers. _Havranek and Iršová (2011) meta-analysis of studies covering 47 countries; 17 of them European._

2. Sectors prioritized in national efforts to attract FDI are found to have **11%** higher unit values of exported products than other sectors. _Harding and Javorcik (2012) covering a global sample of 105 countries._ 3. The FDI wage premia range from **2%** in Germany to **5%** in the United Kingdom, **8%** in Portugal, **16%** in Brazil and **21%** in Indonesia. _Hijzen et al. (2013)._ 4. Female employment is **13%** higher in foreign and exporting firms than in non-exporting firms. _Chen et al. (2012) covering China._ 5. Foreign takeovers of firms tend to have no or even a negative effect on wages. Specifically, wages are **2%** less in acquired firms compared to similar non-acquired firms. _Heyman et al. (2007) covering Sweden._ 6. In 1995, women experienced larger gains from FDI than men, but those gender-based advantages had reversed by 2002. A 10% increase of FDI as a proportion of investment in 1995 was estimated to raise female wages by **3.7%** and male wages by **2%** , as opposed to **1.3%** and **2.4 %** respectively in 2002. _Braunstein and Brenner (2007) covering China._ 7. A 1% increase in FDI as a share of GDP leads to an increase of **0.323%** in domestic investment as a share of GDP over four years. For LDCs, the same increase is associated with a **0.767%** increase in domestic investment as a share of GDP over three years, and a **1.116%** increase over four years. _Wang (2010) covering 50 countries, both developed and developing._ 8. A 1% increase in FDI can lead to a **0.12%** increase in the number of applications for invention patents, a **0.18%** increase for utility model patents, and around **0.47%** increase for design patents. _Cheung and Lin (2004) covering China._ 9. Over **86%** of the total FDI inflow in China has been concentrated in the coastal region. _Cheung and Lin (2004) covering China._ 10. An increase of US$1 billion in FDI stock has been associated with approximately **232** new export lines. For high natural resource countries, the net effect of an increase of US$1 billion in FDI is much lower, at 44 and 18 new export channels, respectively. _Shasheen Jayaweera (2009) covering 29 low-income countries._ 11. A 10% increase in foreign presence in downstream sectors is associated with an increase in the average complexity of newly introduced products by **0.297** . This corresponds to about 30% of the standard deviation in the sample _. Javorcik, et al. (2017) covering Turkey._ 12. Moving from a very low level of GVC participation in a country such as Mali to the levels of participation recorded in Vietnam, the share of intermediate products bought locally increases by **6.4 %.** _Amendolagine et al. (2017), Sub-Saharan Africa and Vietnam._ 13. A one standard deviation increase in share of sales to foreign multinationals can raise our measures of innovation by about 0.015 to 0.030, or approximately **4% to 7%.** _Gorodnichenko et al. (2015) covering transition economies and Turkey._ 14. Local pollution decreases with the scale of foreign investment: for a 1 percent increase in foreign direct investment, sulfur dioxide emission intensity decreases by **0.6-0.7** percent. _Feng Helen Liang (2006) covering China._