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Journals / Anadolu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2026 / Volume: 27 Issue: 2

DO FOREIGN DIRECT INVESTMENTS AND TRADE OPENNESS FOSTER TECHNOLOGICAL CAPACITY? EMPIRICAL EVIDENCE FROM SELECTED COUNTRIES

Yusuf Ünsal(ANADOLU ÜNİVERSİTESİ, İKTİSADİ VE İDARİ BİLİMLER FAKÜLTESİ)0000-0002-7856-5402
İbrahim Tuğrul Çınar(ANADOLU UNIVERSITY, FACULTY OF BUSINESS ADMINISTRATION)0000-0001-8913-7166
Pages
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Publication Date
2026-06-30
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The findings highlight the importance of integrating Foreign Direct Investment-driven knowledge inflows with domestic innovation strategies to strengthen technological sophistication and sustain long-term competitiveness.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study investigates the long-run effects of Foreign Direct Investment and trade openness on technological complexity across 29 countries, over the period 1997-2022.
📊
Key Findings & Data:The results reveal a statistically significant positive long-run impact of Foreign Direct Investment on technological complexity, confirming its role as a channel for technology diffusion and capability upgrading.
💡
Conclusion & Impact:The findings highlight the importance of integrating Foreign Direct Investment-driven knowledge inflows with domestic innovation strategies to strengthen technological sophistication and sustain long-term competitiveness.
🔬Design:Research Article
📍Scope:2022 Verileri
⚙️Variables:Technological Complexity · Foreign Direct Investment · Trade Openness

Abstract

This study investigates the long-run effects of Foreign Direct Investment and trade openness on technological complexity across 29 countries, over the period 1997-2022. Using patent data from the OECD-REGPAT database, a patent-based technological complexity index is computed through the fitness-complexity algorithm. The empirical analysis employs the Augmented Mean Group estimator after controlling for cross-sectional dependence, heterogeneity, and potential structural breaks. The results reveal a statistically significant positive long-run impact of Foreign Direct Investment on technological complexity, confirming its role as a channel for technology diffusion and capability upgrading. In contrast, the effect of trade openness is heterogeneous and context-dependent, suggesting that openness enhances technological capacity only when supported by strong absorptive and innovation capabilities. The findings highlight the importance of integrating Foreign Direct Investment-driven knowledge inflows with domestic innovation strategies to strengthen technological sophistication and sustain long-term competitiveness.

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Cite This Article

Ünsal, Y., Çınar, İ. T. (2026). DO FOREIGN DIRECT INVESTMENTS AND TRADE OPENNESS FOSTER TECHNOLOGICAL CAPACITY? EMPIRICAL EVIDENCE FROM SELECTED COUNTRIES. Anadolu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Volume: 27 Issue: 2. https://doi.org/10.53443/anadoluibfd.1820899

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