Recent empirical studies concerning the impact of foreign direct investment (FDI) on economic development have all been taking into account FDI as a whole. However, the theoretical literature on the topic argues that more attention should be devoted to distinguishing FDI by type, and suggests that FDI with high technological content might play a peculiar role. This paper investigates the existence and the magnitude of this peculiar effect. With reference to developing countries, we find strong evidence that countries with a larger population and a larger stock of human capital, and countries that enjoy lesser uncertainty, are able to attract more FDI with a higher technological content. We also find evidence pointing towards a positive relationship between the share of technology embodied into FDI and the level of economic development in the host country.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
5390.
Find related papers by JEL classification: O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
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