Abstract:
Foreign direct investment (FDI) and its multinationals' activities are well accepted as
an engine of growth by which a host country can benefit from the injection of capital
investment, technology and managerial knowhow to build up indigenous
competitiveness through spillovers effects and productivity gap between foreign
affiliates and local firms New Zealand is a small but developed economy. FDI plays
an important role in the development and growth of local industry in New Zealand. In
the extant literature, there was very few studies research on the performance gap in
New Zealand context. This paper investigates the effect of inward FDI on host
country theoretically, focusing on the spillover effects and firm performance.
Statistical analysis tests the possibility of performance gap's existence in New
Zealand firms. In addition, separated attention is provided to service industry to differ
from manufacturing industries that always be testified in many empirical studies. The
findings provide evidence that foreign owned firms have superior performance
advantages over local firms. But more research needs to be conducted for more
conclusive results.
