Overview of knowledge transfer in MENA countries: The case of Egypt

This paper provides an overview of knowledge transfer and explains the factors that enable or impede absorption capacity and knowledge transfer in the MENA countries, with particular reference to the case of Egypt. We employ the conceptual framework used in the international literature on absorption capacity and international knowledge transfer channels including FDI, international trade, ICT, education, human capital mobility and university-industry linkage, and we examine the factors that enable or impede absorption capacity and knowledge transfer channels in the MENA region and Egypt respectively. One interesting element in our study is that we present a systematic framework for the factors that enable or impede knowledge transfer in Egypt and the MENA region. We find that the factors hindering absorption capacity and knowledge transfer are related to institutions, infrastructure, macroeconomic environment, higher education and training, goods market efficiency and labour market efficiency, financial market development, technological readiness and capacity for innovation. Our results are consistent with the stylized facts in the MENA literature regarding the impediment factors hampering the transfer of knowledge in the MENA region. Our results are also in line with the stylized facts in the international literature regarding the interaction and linkage between the different knowledge transfer channels. The major policy implication from our findings is that knowledge transfer is facilitated by supporting the linkages between the different knowledge transfer channels within this systematic framework. Knowledge transfer through utilization of FDI is facilitated by the sound institutions for the provision of sufficiently qualified labour, ICT infrastructure, opening up to international trade, good university-industry cooperation, RD and innovation capacity. Knowledge transfer through utilization of international trade is facilitated by the sound institutions for the provision of sufficiently qualified labour and ICT infrastructure. Finally, knowledge transfer through utilization of human capital and ICT is facilitated by supporting the complementary relationship between them.