High tech foreign direct investment and its impact on economic development

Antonio Marasco ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Cross-section regression; Foreign direct investment; High tech; Manufacturing; Human capital; Development (search for similar items in EconPapers)
JEL-codes: O33 O14 F21 C31 O57 (search for similar items in EconPapers)
Date: 2002-09, Revised 2005-04
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:5390

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