Title: Absorptive capacity factors that mediate foreign direct investment spillovers: a sector-level analysis from emerging economies

Authors: Nagwa Khordagui; Gehan Saleh

Addresses: College of Management and Technology, Arab Academy for Science and Technology, Alexandria, Egypt ' College of International Transport and Logistics, Arab Academy for Science and Technology, Alexandria, Egypt

Abstract: Although foreign direct investment (FDI) is believed to promote economic growth and knowledge transfer, empirical evidence is mixed. Recent studies argue that the question is not of whether FDI spillover effects exist, but rather of whether the prerequisites for such effects exist. This builds on the notion of absorptive capacity; a country's ability to absorb the benefits FDI offers. This study examines the role of human capital as an absorptive capacity factor for Emerging and Middle Eastern Economies at the sector level. A sample of 30 countries is examined over the period 1990-2009 using panel data analysis. The study makes a contribution by focusing on sector data rather than aggregate FDI inflows to examine the individual sector's influence, allowing for inherent differences. The findings indicate that the results and implications vary according to sector.

Keywords: foreign direct investment; FDI; economic growth; absorptive capacity; human capital; knowledge spillovers; emerging economies; MENA countries; Middle East; North Africa; knowledge transfer; sector data; sector influence.

DOI: 10.1504/IJBG.2016.074486

International Journal of Business and Globalisation, 2016 Vol.16 No.2, pp.188 - 201

Accepted: 07 Jun 2015
Published online: 26 Jan 2016 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article