LOCAL TECHNOLOGICAL CAPABILITY AND PRODUCTIVITY SPILLOVERS FROM FDI IN THE URUGUAYAN MANUFACTURING SECTOR

This article examines intra-industry spillovers from FDI in Uruguayan manufacturing plants in 1988, to determine whether differences in the technology gap between locally-owned plants and foreign affiliates hav e any impact on the relation between local productivity and foreign pr esence, We find a positive and statistically significant spillover eff ect only in a sub-sample of locally-owned plants with moderate technol ogy gaps vis-a-vis foreign firms. Our interpretation is that there are firm-specific differences in the ability to absorb spillovers, and th at these may explain some of the contradictory findings of earlier spi llover studies.