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US Foreign Affiliates, Technology Diffusion and Host Country Human Development: Human Development Index versus Human Capital

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  • Khaled Elmawazini
  • Gamal Atallah
  • Sonny Nwankwo
  • Yazid Dissou

Abstract

In this study, we use a cross-sectionally correlated and timewise autoregressive model and panel data for the period 1966--2000 to investigate human development as a measure of host country absorptive capacity in 30 developed and developing countries. The results suggest that technology diffusion from US foreign affiliates has a positive and significant impact on labor productivity only if host countries have a minimum level of human development. This condition may partially explain why previous studies show mixed support for the hypothesis that foreign affiliates have a positive effect on productivity in developing countries. Although the results have to be interpreted with caution, the policy implication is that human development enhances the capacity of countries to reap the benefits of foreign direct investments.

Suggested Citation

  • Khaled Elmawazini & Gamal Atallah & Sonny Nwankwo & Yazid Dissou, 2013. "US Foreign Affiliates, Technology Diffusion and Host Country Human Development: Human Development Index versus Human Capital," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 69-91, January.
  • Handle: RePEc:taf:indinn:v:20:y:2013:i:1:p:69-91 DOI: 10.1080/13662716.2013.761381
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    References listed on IDEAS

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    Cited by:

    1. Khaled Elmawazini & Sonny Nwankwo, 2013. "Globalisation and Income Gap between Rich and Poor Nations," Economic Issues Journal Articles, Economic Issues, vol. 18(2), pages 19-40, September.
    2. Adil Suliman & Khaled Elmawazini & Mohammed Zakaullah Shariff, 2015. "Exchange rates and foreign direct investment: evidence for sub-saharan Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(2), pages 204-226, April-Jun.
    3. Khaled Elmawazini, 2014. "FDI Spillovers, Efficiency Change and Host Country Labor Productivity: Evidence from GCC Countries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(4), pages 399-411, December.

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