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The Role of Technological Transfer in Amplifying Foreign Direct Investment’s Impact on Economic Growth in Developing Countries

In: Proceedings of the 3rd International Conference on Business, Finance, Management and Economic (BizFAME 2024)

Author

Listed:
  • Hafizah Hammad Ahmad Khan

    (Universiti Teknologi MARA (UiTM) Cawangan Kedah, Kampus Sungai Petani, Faculty of Business and Management)

  • Rosmaiza Abdul Ghani

    (Universiti Teknologi MARA, Kampus Alor Gajah, Faculty of Business and Management)

  • Muhammad Hanif Othman

    (Universiti Teknologi MARA (UiTM) Cawangan Kedah, Kampus Sungai Petani, Faculty of Business and Management)

  • Handri Handri

    (Universitas Islam Bandung, Faculty of Economics and Business)

  • Azib Azib

    (Universitas Islam Bandung, Faculty of Economics and Business)

Abstract

Foreign direct investment (FDI) is widely recognized as a pivotal driver for economic growth primarily due to its role in facilitating technological transfer. This study aims to examine the roles of FDI on economic growth in developing countries, by focusing on the mediating roles of technological transfer. Utilizing a narrative review approach, this study synthesizes peer-reviewed literature from the Scopus database, focusing on both empirical and theoretical contributions. A theoretical framework grounded in neoclassical growth theory and technology diffusion theory was developed to elucidate the relationship between FDI, technological transfer, and economic growth. In addition to the roles of technological transfer in amplifying the impact of FDI on economic growth, the framework also highlights the moderating roles of country’s absorptive capacity. This study contributes to the literature by elucidating the mechanisms underlying FDI-led growth and developing a framework that enables policymakers to make more strategically informed decisions.

Suggested Citation

  • Hafizah Hammad Ahmad Khan & Rosmaiza Abdul Ghani & Muhammad Hanif Othman & Handri Handri & Azib Azib, 2025. "The Role of Technological Transfer in Amplifying Foreign Direct Investment’s Impact on Economic Growth in Developing Countries," Advances in Economics, Business and Management Research, in: Mohd Rizaimy Shaharudin & Azyyati Anuar & Preecha Wararatchai & Natpatsaya Setthachotsombut & Wissaw (ed.), Proceedings of the 3rd International Conference on Business, Finance, Management and Economic (BizFAME 2024), pages 120-129, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-827-1_10
    DOI: 10.2991/978-94-6463-827-1_10
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