The Effects of Technology Spillover Resulted from Foreign Direct Investment on the Industry Performance
Subject Areas : Entrepreneurship and Mnagement of Knowledge-based Firms
Abolfazll
Shahabadi
1
(Tarbiat Modares University)
Seyed Arash
Valinia
2
Zahra
Ansari
3
Keywords: Foreign Direct Investment, Technology Spillover, Human Capital, Industry Sector Performance, Foreign R&D Accumulation.,
Abstract :
According to many economists, since the multinational enterprises entering the host economy have relatively more modern technologies than domestic firms, developing countries can reduce their technological gap through FDI inflow channel. It should be noted that the technology spillover of foreign investors is a function of domestic capacity for absorbing these technological spillovers. Considering the determining role of industry sector in the world economy, the goal of present study is to investigate the spillover effects of foreign investment from technological perspective, on the performance of industry sector of Iran during 1995-2009 years, in form of development plans. The results of the study show that during the second development plan a considerable correlation did not exist among improving the human capital (as the absorption capacity criteria), absorbing the foreign investment, spillover effects, and the industry sector performance. While in the third development plan, the mentioned correlations were significant. The reasons for the above mentioned significant correlations are as follows: policy requirements of the third plan about improving the research and development in macro-level of the economy, passing new laws of protecting and spreading the foreign direct investment in 2002. It is worth noting that while the above mentioned correlations had improved during the fourth development plan compared to the second plan, it shows weaker performance in comparison with the third plan. As a result, it should be noted that the mentioned correlations in industry sector were not significant during 1995-2002 years.