Foreign Direct Investment and Its Impacts on Domestic Firms

Title of Project

Foreign Direct Investment and Its Impacts on Domestic Firms

Name of Advisor/s

Sizhong Sun


College of Business, Law & Governance

Summary of Project

Foreign direct investment has played an important role in economic development, particularly for developing countries. The presence of foreign firms in the host economy is likely to affect domestic firms. For example, a number of existing studies have found FDI generates productivity spillovers to domestic firms. Researchers have summarized three channels that such spillovers can occur, namely the forward and backward linkages, worker mobility and competition and demonstration effects. Given the potential productivity spillovers from FDI, this project seeks to investigate how the presence of FDI affects domestic firms’ behaviour, such as innovation, advertising, and exporting, both theoretically and empirically in a host economy.


FDI, International Trade, International Economics, Industrial Organization, Economic Development, Industrial Economy

Would suit an applicant who

Has a knowledge of economics (international economics and industrial organization), and is able/willing to learn/apply the economics techniques to analyze how the presence of foreign firms affects domestic firms’ behaviour, both theoretically and empirically.