Interactive Effect of Institutions and Technological Readiness on Technology Spillovers through the Import Channel

With the world entering a new phase of development, resource-based economies are giving way to knowledge- and technology-based economies. In this context, leveraging the benefits of trade partners’ investments in research and development and the production of new technologies is one of the key ways to achieve a knowledge- and technology-based economy, which can enhance total factor productivity and promote national innovation. Accordingly, the present study employs a panel data approach, using both the Generalized Method of Moments (GMM) and the Fully Modified Ordinary Least Squares (FMOLS) methods, to examine the interactive effect of governance institutions and technological readiness—including ICT development, human capital skills, domestic R&D activities, industrial activities, and facilitation of access to financial resources—on technology spillovers through imports in selected samples of developing and developed science-producing countries during the period 2000–2022. The estimation results indicate that governance institutions and technological readiness indicators individually have positive and significant effects on technology spillovers in both groups of countries, with differing estimated coefficients in the short and long run. Furthermore, the interaction between governance and each of the technological readiness indicators also has a positive and significant effect on technology spillovers in both groups. Notably, the estimated coefficients of these interaction effects are larger than the coefficients of their individual effects