rather than on the more indirect GDP related spillover effects that has been the focus of most empirical studies on FDI flows undertaken hitherto. ii. The paper contributes to the advancement on the knowledge frontier on cross-border MNC-FDI flows by analyzing spillover using for the first time a multiplicatively complete index, which enables the decomposition o of technological change due to FDI flows into measurable spillover effects in the form of scale economies and technical efficiency. iv. The empirical results reported in this paper are fully cognizant of the consequences of the divergence in the absorptive capacity in host and source countries for metabolizing and generating spillover effects. In particular developing countries lack the human capital, infrastructure , banking and financial institutions and business ethos that gives OECD countries a head start over developing countries in attracting MNC-FDI flows. iv. The empirical results of the study have taken account of both the crowding-in and crowding-effects on domestic firms of both FDI inflows and outflows in a symmetric manner unlike many other studies that have focused only on one side of the coin .v. Finally the empirics in the paper are based on the compilation of an up-to-date and comprehensive panel database from the most authoritative international and national databases that have been published recently . The stylized facts reported in Table 1 indicate that over the past three decades since the 1980s world FDI outward stocks and inward stocks have increased more than 25-fold and 30-fold, respectively. The growth of both inward and outward FDI stocks for the world has outstripped the growth rates of GDP and exports after registering temporary drops during the Asian Financial Crisis (1997) and the Global Financial Crisis (2007). It is noteworthy that for advanced countries, FDI flows exceeded the growth rates of GDP and exports and these strong growth trends are likely to continue into the foreseeable future. Although the Asian Financial Crisis (1997) and the Global Financial Crisis (2007) caused a dent in the inward and outward stocks of FDI, the stylized facts reported in Table 1 show that bi-directional flows have grown
rather than on the more indirect GDP related spillover effects that has been the focus of most empirical studies on FDI flows undertaken hitherto. ii. The paper contributes to the advancement on the knowledge frontier on cross-border MNC-FDI flows by analyzing spillover using for the first time a multiplicatively complete index, which enables the decomposition o of technological change due to FDI flows into measurable spillover effects in the form of scale economies and technical efficiency. iv. The empirical results reported in this paper are fully cognizant of the consequences of the divergence in the absorptive capacity in host and source countries for metabolizing and generating spillover effects. In particular developing countries lack the human capital, infrastructure , banking and financial institutions and business ethos that gives OECD countries a head start over developing countries in attracting MNC-FDI flows. iv. The empirical results of the study have taken account of both the crowding-in and crowding-effects on domestic firms of both FDI inflows and outflows in a symmetric manner unlike many other studies that have focused only on one side of the coin .v. Finally the empirics in the paper are based on the compilation of an up-to-date and comprehensive panel database from the most authoritative international and national databases that have been published recently . The stylized facts reported in Table 1 indicate that over the past three decades since the 1980s world FDI outward stocks and inward stocks have increased more than 25-fold and 30-fold, respectively. The growth of both inward and outward FDI stocks for the world has outstripped the growth rates of GDP and exports after registering temporary drops during the Asian Financial Crisis (1997) and the Global Financial Crisis (2007). It is noteworthy that for advanced countries, FDI flows exceeded the growth rates of GDP and exports and these strong growth trends are likely to continue into the foreseeable future. Although the Asian Financial Crisis (1997) and the Global Financial Crisis (2007) caused a dent in the inward and outward stocks of FDI, the stylized facts reported in Table 1 show that bi-directional flows have grown
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