TECHNOLOGY, MARKET CHARACTERISTICS, AND SPILLOVERS

Using detailed (unpublished) industry data from the Mexican manufacturing industry, this paper examines the relation between observed technology spillovers from foreign direct investment and proxies for the complexity of MNC technology. The results suggest that advanced MNC technologies or large technology gaps alone do not constitute unsurmountable obstacles to spillovers, but that spillovers are less likely in industries with 'enclave' characteristics, i.e. where large technology gaps and high foreign shares coincide.