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Using cross sectional data, this study analyses the spillover effects of foreign direct investment in Tanzania’s manufacturing sector.
The findings reject a proposition that FDI intensity has improved domestic manufacturing firms productivity; no vertical technological spillovers occurred and a negative correlation between vertical spillover and FDI presence was found.
Instead there is a positive correlation between FDI and horizontal technology spillover.
The study, therefore, recommends that the government should make concerted efforts to ensure that FDI promotion addresses technology spillovers both within the industry and across the sector; as well as strengthening and widening the education system to enable it absorb new technology brought about by FDI.
Johansein is a trade economist specialised in the field of International Trade and Industrialisation.
He has extensive knowledge of industrial policy and trade development with experience in policy formulation and analysis particularly for Eastern and Southern Africa.
He has worked with various international and regional institutions.
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