
Foreign Direct Investment and Financial Constraints: Firm-Level Evidence from Cambodia, Lao PDR, and Myanmar
- Bopith Bun
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제36권 제2호
- 등재여부 : KCI등재
- 2021.06
- 227 - 261 (35 pages)
Financial constraints have been a significant obstacle to firms operating in developing countries. Prior studies show that foreign direct investment (FDI) helps to ease credit constraints for domestic firms. However, they only account for horizontal FDI spillovers. This paper therefore investigates both horizontal and vertical FDI spillovers using firm-level data from Cambodia, Lao PDR, and Myanmar (CLM). The key findings of this paper are threefold. First, FDI inflows lessen the financial constraints faced by local firms through partnership or joint venture. Second, an increasing share of FDI in horizontally and vertically related industries raises higher credit constraints for domestic firms. Third, the crowding-out effect of FDI is not uniform across domestic firms of different sizes. Therefore, policymakers should be aware of these possible negative spillovers and formulate policy to maintain FDI inflows while also ensuring the growth and survival of domestic firms.
I. Introduction
II. Literature Review
III. Methodology
IV. Data
V. Results and Discussion
VI. Conclusions and Policy Implications
References