Abstract
Research background: In existing studies two main channels of international technology spillovers are extensively discussed ? trade and FDI. Nevertheless empirical studies give mixed results regards the nature and extent of trade and FDI spillovers.
 Purpose of the article: The aim of the article is to study import and foreign direct investments (FDI) as channels of international TFP spillovers.
 Methods: We employ dynamic spatial autoregression (SAR) methods. Our panel comprises data for 41 developed and upper mid-developed countries over the period 1995?2014.
 Findings & Value added: Our preliminary results show that (1) the trade and investment channels are both important for technology transfer, (2) the degree of their significance depends on the absorptive capacity such as good quality of the institutions.
Highlights
Total factor productivity (TFP) provides a synthetic assessment tool to measure the evolving efficacy of inputs deriving from progress in technology. Easterly and Levine (2001) suggest that “economists should devote more effort toward modeling and quantifying TFP”
Findings & Value added: Our preliminary results show that (1) the trade and investment channels are both important for technology transfer, (2) the degree of their significance depends on the absorptive capacity such as good quality of the institutions
The aim of the paper is to elucidate on import and foreign direct investments (FDI) as the channels of international TFP spillovers using dynamic spatial autoregression (SAR) methods
Summary
Total factor productivity (TFP) provides a synthetic assessment tool to measure the evolving efficacy of inputs deriving from progress in technology. Easterly and Levine (2001) suggest that “economists should devote more effort toward modeling and quantifying TFP”. One of the well-known TFP determinants are spillover effects of technology (or more general productivity). Spillover effects are interesting as an international phenomenon. Spillover effects may be transmitted by a few channels. Some part of capital endowment is purchased overseas and has a positive effect on the quality of domestic gross fixed and human capital stock. Foreign direct investment facilitates the direct and indirect transfer of technology. Knowledge transfer is promoted through foreign trade, and in particular through goods and service imports from countries with more advanced technology. Knowledge transfer may be promoted by the formal and informal exchange of human capital stock across different countries due to trade- and FDI unrelated relationships. There is a growing body of literature that addresses different channels of international spillovers. Whether international technology spillovers are FDI and trade-related is still a debated issue
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