Double-Edged Effects of Technology Gap and Technology Spillovers of Foreign Direct Investment: An Empirical Analysis

Abstract

This empirical analysis investigates the dual impacts of technology gap and technology spillovers resulting from Foreign Direct Investment (FDI). Drawing upon theories of international business, innovation, and economic development, this research examines how the technology gap between the host and home countries of FDI influences the extent and nature of technology spillovers. Through quantitative analysis of firm-level data and industry-level indicators, this study explores the mechanisms through which FDI contributes to technology diffusion, innovation, and productivity enhancement in host countries, while also exacerbating disparities in technological capabilities and competitiveness. The findings offer insights into the complex dynamics of technology transfer and absorption in the context of FDI, highlighting both the opportunities and challenges associated with foreign investment for host economies. This study contributes to the literature on FDI, technology transfer, and economic development by providing empirical evidence and theoretical insights into the double-edged effects of FDI-driven technology spillovers.