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High tech foreign direct investment and its impact on economic development

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  • Marasco, Antonio

Abstract

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.

Suggested Citation

  • Marasco, Antonio, 2002. "High tech foreign direct investment and its impact on economic development," MPRA Paper 5390, University Library of Munich, Germany, revised Apr 2005.
    • Handle: RePEc:pra:mprapa:5390
    as

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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cross-section regression; Foreign direct investment; High tech; Manufacturing; Human capital; Development;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O14 - Economic Development, Innovation, 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; Quantile Regressions; Social Interaction Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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