Assessing the roles of absorption capacity in technological spillovers and economic growth nexus

Abstract

The paper aims to empirically assess the effects of technological spillovers on economic growth and to examine the roles of host country absorptive capacity. The empirical analysis was carried out at the country level on a panel of five Asian countries covering the period from 1972 to 2018. As the variable of interest (technological spillovers) and mediator variable (absorptive capacity) are captured with a variety of indicators, hence two empirical models are estimated with different specifications. The study’s findings indicate that technological spillovers through all three channels have a positive effect on economic and TFP growth. Touching on the role of absorptive capacity in technological spillovers and economic growth nexus, study findings reveal that the human capital of the sample countries has no significant role to absorbed imported technology in the growth process of the host country. However, the empirical indication illustrates that a country holding comparatively more domestic R&D expenditure yields the potential gain of technological spillovers in economic growth.