Dynamic model of the technology spillover from foreign direct investment and productivity growth: a case from Thailand
by Pard Teekasap
J. for Global Business Advancement (JGBA), Vol. 9, No. 1, 2016

Abstract: This paper studies the relationship between technology spillover from foreign direct investment (FDI) and productivity growth through the development of a dynamic model. The model has been developed based on the feedback numerical simulation approach. The variables included in the model are productivity, gross domestic product (GDP), GDP per capita, FDI, employment and gross fixed capital formation (GFCF). The model has been applied to the Thailand context as a case study. The results show that increase in technology spillover can gradually increase the productivity of the country and the GDP per capita. Higher GDP per capita will attract more FDI into the country but with a significant delay. When the unemployment rate is low, reducing technology spillover can increase the unemployment rate but more technology spillover does not reduce the unemployment rate.

Online publication date: Mon, 22-Feb-2016

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