Relationship between flow of foreign direct investment and innovation of Iran in comparison with prospective documented countries
Subject Areas : Innovation and Invention
Abolfazll
Shahabadi
1
(Tarbiat Modares University)
Nima
Nilofarforoushan
2
Keywords: Innovation, Foreign Direct Investment, Islamic Republic of Iran, Outlook of Documented Countries,
Abstract :
In the present era, innovation as a necessity for sustainable economic growth and development, improvement of living standards and economic prosperity of people has been considered by economic experts. On the other hand, the development of innovation in each country requires a capital formation to secure the necessary financing. All countries, developing ones in particular, can through flow of foreign direct investments attract financial resources and transfer of technology to create a platform for innovation to grow and thrive. Therefore considering the important role of innovation and foreign direct investment in increasing the competitive strength, this study investigates the relationship between foreign direct investments and innovative visions in Iran’s economy compared to outlook of documented countries during the period between 1995 and 2008. The results of experimental studies indicate the existence of a two-way relationship between foreign direct investment and innovation in these countries. Amongst these countries, Turkey, Iran and Saudi Arabia have been most successful in attracting foreign direct investment and in the development of innovative components, while Yemen and Tajikistan have shown the weakest performance with respect to attracting the same. Moreover, based on the results, the status of the documented countries in terms of innovation and direct investment indicators is not satisfactory compared to the rest of the world. This may be attributed to problems of absorption capacity, inconsistencies between macro-economic policies, education and research policies, and….