FDI and ICT Effects on Productivity Growth

This article investigates for possible effects stemming from Foreign Direct Investment (FDI) and Information and Communication Technologies (ICT) on productivity growth. Foreign Direct Investment (FDI) is considered, among others, an important channel for technology diffusion. Multinational enterprises possess superior technology and management techniques, some of which are captured by local firms when multinationals locate in a particular economy. The analysis is based on panel data covering Middle East countries during the period 1990–2010. The growth accounting results indicate that the growth contribution of ICT and FDI was quite low this countries. The econometric results showed a positive and significant impact of ICT and FDI in these countries.