Articles

A Study of Foreign Direct Investment and Technology Spillover Effect: Empirical Evidence from OECD Member Countries

Geon-woo Park

Abstract

The study aims to empirically analyze the impact of foreign direct investment (FDI) on the economic development and technology spillover effect of OECD member countries. Technology spillover through FDI has been one of the most important topics of discussion related to FDI, and various approaches have been taken to address this topic since the late 1980s. This is because the effects of FDI have great significance in enhancing the productivity of local firms, and in promoting national competitiveness and economic growth. Nevertheless, previous studies lacked a comparative analysis between countries, and were mainly focused on a single industrial field within a specific country. To address this shortcoming, the study tried to overcome the limitations of existing studies, and used vector auto regression analysis, Granger causality analysis, impulse response function model, and panel regression analysis to discover more concrete implications. According to the analysis, a correlation was found in some of the OECD member countries, but the existence of a technology spillover effect differed in each country. It is expected that the findings of this study can contribute to a better understanding of the productivity and technology spillover effects from FDI.

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