Patenting, Licensing, Trade, Foreign Direct Investment and Economic Growth: A Panel Data Analysis of Middle and Low Income Countries

Abstract

Transfer of technology through various channels like patenting, licensing, trade and foreign direct investment is considered as an integral component of economic growth both in developed and developing economies. The study investigates the impact of different technology transfer channels such as patenting, licensing, trade and foreign direct investment on economic growth for a balanced panel of 28 middle and low income countries over a period of 1975–2010 through fixed effect methods and the empirical results show that each channel affects differently in the sample countries. For full sample of middle income countries, only licensing and foreign direct investment are the most effective channels for the transfer of technology, while this is true for patenting and licensing in case of upper middle income countries. In lower middle income countries, licensing and foreign direct investment and in low income countries, only foreign direct investment have been found to be the effective channels for the transfer of technology.